Companies
Adani Group plans wholesale, sourcing tie-up with Flipkart
Summary
Flipkart Wholesale caters to 1.5 mn clients, including kiranas, hotels, cafeterias, offices and institutions
MUMBAI : Adani Group and Walmart Inc.’s Flipkart unit are in advanced talks to expand their partnership beyond warehousing and data centres into new domains, including wholesale e-commerce and sourcing of groceries and household goods, two people with direct knowledge of the development said.
“Adani could enter into a new agreement with Walmart for a strategic partnership, under which Flipkart could sell a range of products, and a revenue-sharing agreement will fetch income for both Adani and Walmart on a proportionate basis," said one of the people cited above, seeking anonymity.
The partnership will not only provide Flipkart with a wider array of products that it can sell to retailers but will also bring in new wholesale customers who are associated with Adani Group entities in the packaged goods and consumer durables businesses, the person added.
“Both Adani and Flipkart will jointly manage the sale of goods on a wholesale basis to shops and business owners as per the proposed agreement. The partnership is a part of Adani’s strategy to increase its presence in the e-commerce space," said the first person.
Walmart carries out its online wholesale business in India through Flipkart Group’s business-to-business arm Flipkart Wholesale.
Flipkart Wholesale’s FY21 revenue rose 25% to ₹42,941 crore from the previous year and loss narrowed 22% to ₹2,445 crore.
Earlier this year, Flipkart Pvt. Ltd, the e-commerce major’s parent entity incorporated in Singapore, infused $233 million in the wholesale arm of the business, Flipkart India Pvt. Ltd (Flipkart Wholesale).
Flipkart Wholesale caters to more than 1.5 million clients across India, including kiranas, hotels, restaurants, cafeterias, offices and institutions.
On 18 January, Flipkart announced that it would reorganize its business operations to reduce costs and increase investments. As part of the reorganization, all Flipkart Wholesale employees (except those in core merchandising and operations) will transition to their respective roles at the group level in Flipkart.
Emails sent to spokespeople for Adani Group, Flipkart and Walmart did not elicit any response.
“The latest partnership being planned with Adani Group will entail reorganization of resources at Flipkart Wholesale, and Adani Group may provide new large storage and distribution facilities for FMCG products at locations where Flipkart is yet to gain an optimum market share. This may help Flipkart gain a large number of new customers in the wholesale space. On the other hand, Adani will get an active e-commerce business and gain from the revenue generated from the wholesale business on Flipkart as per the new partnership being planned," the person said.
This partnership may enable Flipkart to compete on a stronger footing against rival wholesalers such as Udaan, Amazon and JioMart. “As per the current discussions, Adani Group will provide Flipkart with many new storage facilities, vehicles and manpower to enable Flipkart to scale up its wholesale business while offering products online with larger discounts to shops, retailers and department stores," the person said.
Flipkart Wholesale has 28 Best Price stores in the country.
Flipkart’s wholesale business essentially involves selling products in bulk to other companies at a discount on the app. Shops, factories, retailers and departmental stores typically buy products on a wholesale basis either for their internal consumption to produce other goods or to resell the products in smaller quantities to individual retail customers or enterprise chains.
In April last year, Flipkart announced a commercial partnership with Adani Group to strengthen its logistics infrastructure.
