It has just been a day after the American multinational retail company Walmart announced acquisition of 77 percent of stake in Flipkart, but the company is not stopping just there. On Thursday, The company truly believing and showing how important India as a market was for them, announced that they will be opening 50 new stores in the next four to five years.
Walmart works on an wholesale cash-and-carry business model and currently has 21 stores in the country. “We currently have 21 stores and plan to open 50 stores in 4 to 5 years. Plans are on track,” Walmart India President and CEO Krish Iyer told PTI. This in a way is giving competition to brands such as Metro Cash and Carry and also at the same time, making sure it does not lose out on the omnichannel experience it can offer, with its strong capabilities in the retail space.
“We have a pipeline of 20 stores and we expect to open 5 stores in the current year and then pick up pace,” Iyer added.
Flipkart to be separate entity
On Wednesday, the Walmart chief executive officer, Doug McMillon who was in India said that Flipkart will continue to operate as a separate entity. Kalyan Krishnamurthy will continue to be the CEO of the company, while co-founder Binny Bansal will be the Group CEO of Flipkart. Sachin Bansal, the other co-founder had quit the company.
Walmart bought 77 percent of Flipkart from existing shareholders, including SoftBank, for USD 16 billion along which included fresh investment USD 2 billion of fresh equity. This has marked inroads into the ecommerce space of Indian market, giving competition to global rival Amazon.
Rival Amazon: Will Amazon make a counter offer to Walmart?
Amazon had already been aggressively expanding in India. Founder Jeff Bezos has promised to pump in more than USD 5 billion to win the Indian online retail market. In a recent letter to investors, Bezos reiterated his plans to invest in the country by highlighting Amazon.in as the fastest growing marketplace in India. After losing in China to Alibaba and JD.com, Bezos clearly would not want to take any chances with the next biggest market outside of US. According to a report by Forrester, Amazon India was behind Flipkart by only one percent in GMV market share last year. However, this lag widens when you picture in Flipkart's subsidiaries like Myntra and Jabong. It is now going to be interesting, how Amazon will tackle the combined capabilities of Walmart and Flipkart.
eBay announced it is severing business relations with Flipkart
Meanwhile, eBay has announced that it has notified Flipkart of its intentions to sell its equity holdings in Flipkart, which eBay estimates to be 1.1 billion USD in value.
"eBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion. Following the close of the transaction, we also will be ending our current strategic relationship with Flipkart, which includes unwinding our commercial agreements with Flipkart and terminating Flipkart’s license to use the eBay.in brand," said the company in a statement.