Walmart has infused fresh $1.2 Bn in its subsidiary firm and India’s homegrown e-commerce giant Flipkart. The fresh capital infusion round has valued Amazon’s India rival at approximately $24.9 Bn. According to reports, clutch of existing investors have also pumped funds in this round but their details have not been disclosed.
This is Walmart’s first big capital infusion in Flipkart since acquiring the Bengaluru headquartered company for whopping $16 Bn in 2017.
Commenting on the funding, Flipkart’s CEO Kalyan Krishnamurthy said “we’re grateful for strong backing of our shareholders as we continue to build our platform and serve the growing needs of our consumers during these challenging times.”
He further added that Flipkart is already a leader in electronics and fashion and is rapidly increasing share in other general merchandise categories and grocery.
Flipkart recently sought to further strengthen its dominance in fashion space by acquiring stake in Arvind Fashion’s Arvind Youth Brand.
Walmart’s massive capital infusion has come at a time when India’s e-commerce sector is steadily recovering from the COVID-19 crises. More importantly, JioMart’s entry a few months back into e-commerce space is likely to increase competition by quite a few notches in the coming period. Jiomart is a joint venture project between Reliance retail and cash cow Reliance Jio.
Reliance Jio’s recent fundraising spree over the past few weeks has already become a talking point in India’s corporate world. It is but certain that Jio will invest a certain part of its recent fund infusion into its e-commerce arm.
Apart from the impending threat from Jiomart, the deep-pocketed Amazon India is ever ready to assert its competitive dominance over India’s homegrown e-commerce player.
Amid all the competitive pressure, Flipkart can take heart from the fact that its monthly active users increased by an impressive 45% in the financial year that ended in March this year.