Flipkart, the Indian eCommerce company owned by Walmart, is reportedly in discussions to acquire Namdhari’s Fresh, a grocery store in India.
CNBC-TV18, citing sources, reported Flipkart is interested in the grocery store chain to expand its food and grocery offering. Namdhari’s Fresh operates more than 30 stores in Bengaluru, in the southern part of India.
According to the report, Walmart is leading the talks with the grocery store chain, but the deal will be made through Flipkart. The terms of the potential transaction are still being worked out, noted the outlet. Sources said Walmart is particularly interested in companies that have a strong agri-supply chain. The fact that Namdhari’s sources from local farmers is an essential part of the talks between the two.
Flipkart launched its grocery unit in 2018, teaming with Supermart in Bengaluru. Meanwhile, Reuters, citing one source familiar with the matter, reported Flipkart and Namdhari’s Fresh have held talks in the past. It’s not clear whether the fresh round of discussions will result in a deal.
A race to become the dominant eCommerce player in India has been going on for some years, prompting the likes of Amazon and Walmart to pour billions of dollars into the region. Last year, Walmart paid around $16 billion for Flipkart, while Amazon has vowed to invest $500 million to grow its presence in the country.
The road to success hasn’t been easy, particularly for Amazon and Walmart. In February, new eCommerce rules went into effect that prohibited foreign eCommerce companies from owning a large stake in local online retailers. They are also prohibited from inking exclusive deals with merchants. Amazon and Walmart had sought extensions, but were forced to overhaul their business models to comply. Critics of Amazon and Flipkart contend the heavy eCommerce hitters have created sellers or vendors in which they have a direct or indirect stake, so they can offer deeply discounted items. The critics contend that could hurt the merchants that are not operating online.