NEW DELHI: Flipkart’s sprawling ecosystem is the company’s true advantage, its new owner Walmart believes. Speaking at an investors conference, Judith McKenna, Executive VP, President and CEO of Walmart International, pointed out that most of the company’s diversified interests are growing at a substantial pace, adding to its strengths.
Walmart had in May signed its largest deal to date, agreeing to pay up $16 billion for 77 per cent of Flipkart. The transaction now awaits approval from the Competition Commission of India (CCI).
“What’s really unusual about Flipkart is that it’s not just an e-commerce retailer… is it’s actually creating a platform, an ecosystem… operating within that market. And we think that’s one of the areas that gives it a true advantage,” McKenna said.
While admitting that Flipkart’s general merchandise site is by far the biggest part of the business, McKenna pointed out that both of Flipkart’s clothing e-commerce brands -- Jabong and Myntra -- are growing fast. So is its logistics business eKart, and its payments app PhonePe.
“eKart operates in over 800 cities already. It does about 0.5 million deliveries a year. But, it’s unique to Flipkart that it’s got its own logistics network sitting behind its trading platform,” McKenna said. While Walmart expects the deal to close later this calendar year, subject to regulatory approvals, various trader bodies still oppose the deal alleging violation of FDI norms.
The Confederation of All India Traders (CAIT) has threatened a nationwide agitation if the government clears the deal, with the association claiming that its requests to bring in e-commerce reforms had fallen on deaf years “which encouraged Walmart to buy Flipkart and enter into retail trade indirectly”.With the deal still pending before the Competition Commission of India, PTI reported that the CCI may suggest structural changes to the deal to address possible competition concerns.