Reuters, citing the company, reported the second loyalty program — which will be called Flipkart Plus — will roll out on Aug. 15, India’s Independence Day. The goal is to increase customer retention and to take on Amazon.com and its Prime subscription service. Under the program, customers will get free fast delivery and early access to sales events. The customers will also get an increased level of customer support, noted Reuters.
In May Walmart announced a deal to acquire a 77 percent stake in Flipkart for $16 billion. In a press release at the time, Walmart said once the deal is completed the retailer will own 77 percent of Flipkart. The remainder of the business will be held by existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft. “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer, in the press release announcing the deal. “As a company, we are transforming globally to meet and exceed the needs of customers, and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global, and Microsoft, which will be key strategic and technology partners.”
Under the terms of the deal, the investment in Flipkart includes $2 billion of new equity funding, which Flipkart will use to accelerate growth. The two companies are also in talks with other potential investors who could join the round, lowering Walmart’s investment stake once the deal is complete. Walmart noted that even with other investors, the retailer will still hold a majority stake in Flipkart. Tencent and Tiger Global will remain on Flipkart’s board, which will also include Walmart executives and independent members.