FLIPKART PUTS $201 MILLION IN WHOLESALE ARM
BENGALURU: Flipkart’s Singaporeincorporated parent has infused ₹1,431 crore ($201 million) into its wholesale entity in India amid an intensifying and costly battle for marketshare with Amazon.com Inc.
The latest fund infusion from parent Flipkart Pvt. Ltd was approved in December. In the same month, the Singapore-listed entity infused roughly ₹2,190 crore ($304 million) into the local unit, showed regulatory filings sourced from business intelligence platform Paper.VC.
The fresh outlay by Flipkart comes as the Walmart Inc.-owned company seeks to fight off the challenge from Amazon to keep its leadership of India’s growing $18 billion online retail market, and a regulatory tussle with the government, which has issued new foreign direct investment (FDI) rules for e-commerce firms that threaten to upend the online retail industry.
Mint reported on October 1 that Flipkart has begun talks with strategic investors to raise fresh capital after discussions with Google Inc. collapsed last year.
Flipkart is expected to spend billions of dollars over the next few years as it looks to keep its supremacy in the e-commerce market against a resurgent Amazon. On May 22, Mint reported Flipkart is likely to burn as much as $2 billion in cash over the next 18 months—an affirmation that sales growth, rather than cutting losses, remains the top priority for the online retailer after being acquired by Walmart.
In a December interview, Flipkart CEO Kalyan Krishnamurthy said the company had witnessed transaction growth of more than 80% in some months as e-commerce is booming again, and it plans to push newer categories such as furniture and groceries over the next three years. Krishnamurthy also indicated Flipkart may start a video content business, either through a partnership or by developing a new business internally.
Flipkart’s payments arm PhonePe may also raise funds separately as it seeks to catch up with bigger rival Paytm. Walmart has indicated it is willing to continue funding PhonePe for the near future, but is open to the idea of bringing in more strategic partners.