BENGALURU: Homegrown e-commerce giant Flipkart has received a $1.2-billion fund infusion in a fresh equity round led by American retailer Walmart along with the existing shareholders that values the e-tailer at $24.9 billion, the Bengaluru-headquartered company said in a statement.
The fresh round of funding aims to consolidate Flipkart's position in a tightly contested e-commerce space in India where Amazon is the other leading player. Mukesh Ambani’s JioMart e-commerce platform launched earlier this year has also made inroads in the sector, leveraging its telecommunication/ digital platform Jio's 350-million subscribers reach.
Retailer Walmart had acquired an 81.3% stake in Flipkart in 2018 for $16 billion, which valued Flipkart at $21 billion. Flipkart said that it will be funded in two tranches over the remainder of the fiscal year.
"We're grateful for the strong backing of our shareholders as we continue to build our platform and serve the growing needs of Indian consumers during these challenging times. Since Walmart's initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships and new services. Today, we lead in electronics and fashion, and are rapidly accelerating our share in other general merchandise categories and grocery, all the while providing increasingly seamless payment and delivery options for our customers. We will continue innovating to bring the next 200 million Indian shoppers online," Flipkart CEO Kalyan Krishnamurthy said.
Despite the government mulling enforcing stricter FDI norms , market-competitive ethics and promoting Make in India brands on the e-commerce platforms, the fund infusion in companies like Amazon, Flipkart hasn't dried up. Rival Amazon recently said that it will spend $1 billion to tie-up with the local neighbourhood stores/small businesses across India, who are at the heart of the country's retail industry.
As the slogans of Aatmanirbhar Bharat and Vocal for Local grow throughout the country, the trader body Confederation of All India Traders, which represents 70 million small businessmen, said they will launch an online marketplace to promote the indigenous brands/ products.
Flipkart, meanwhile, said that it has surpassed 1.5 billion visits per month and reported a 45-percent growth in monthly active customers and 30-percent growth in transactions per customer for FY20. Onboarding sellers/ MSMes, tapping the Tier-II, Tier-III cities have been the key strategies for both Amazon and Flipkart.
However, the country's brick-and-mortar stores (kirana stores) have proved to be the mainstay of the majority across the country especially when the government imposed months-long lockdown due to the COVID-19 pandemic.
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