Wal-Mart India Private Limited, which operates the Best Price wholesale business in India, will be acquired in its entirety by Flipkart Group.
The stores operate like warehouse clubs, serving independent retailers and other small businesses. Under India’s regulations, Walmart cannot sell directly to consumers through its websites or open supercenters.
Already, Walmart said, Flipkart has demonstrated “extensive leadership in the consumer eCommerce segment and technology for the country’s mom-and-pop ‘kirana’ grocery stores and other small retailers.”
“As the eCommerce pioneer in India, the Flipkart Group has transformed the shopping experience for millions of Indian consumers,” said CEO Kalyan Krishnamurthy. “With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country.”
Walmart said it will set up a Flipkart Wholesale business this summer, which it hopes will “help transform” India’s retail scene.
According to The Wall Street Journal, a Walmart spokesperson declined to share financial terms of the deal. With the sale, Flipkart will gain 5,200 employees.
Earlier this month, Flipkart Group announced it had raised $1.2 billion in a venture funding round led by Walmart. The investment values Flipkart at $24.9 billion.
Last month, Flipkart rolled out a voice assistant powered by artificial intelligence (AI) to enable customers to shop online in multiple languages, including Hindi and English. However, the two companies are facing some regulatory obstacles.
The Indian government recently rejected Walmart’s plans to gain a retail license for selling food through Flipkart’s online marketplace. The company reportedly plans to re-apply.
The global trend is that giant U.S.-based companies continue to encounter pushback from foreign business groups and governments against their expansion plans.