Walmart looking for board of ‘Avengers’ to run Flipkart: CEO
Flipkart Group will be treated as independent entity that is boardrun
NEWDELHI: Walmart Inc will treat Flipkart Group, in which it acquired a 77% stake, as an independent company that is boardrun, with its own “team of Avengers on board”, the company’s chief executive officer (CEO) Doug McMillon said in an interaction with editors in New Delhi on Thursday.
Retail is a local business, he explained. Binny shouldn’t ask, when faced with a problem, “What would Arkansas (Bentonville, Arkansas, where Walmart is headquartered) think?”, he said.
That means the US retail giant will keep Flipkart separate from its cash-and-carry (wholesale) business in India, which has 21 stores right now and plans to open 50 more in the next 4-5 years.
Binny Bansal, the CEO and new executive chairman of Flipkart Group, said the deal would help the e-commerce marketplace leverage Walmart’s capabilities. “E-commerce in India is only 2-3% of the retail business; there’s no reason it can’t be 25%.” Both Bansal and McMillon stressed that the synergies would work both ways, with Walmart tapping Flipkart’s expertise in payments and technology.
“We don’t have payment capabilities that robust anywhere,” McMillon admitted, referring to Flipkart’s PhonePe.
In the long run, Flipkart would go public, both Bansal and McMillon said, and also generate around 10 million jobs, directly and indirectly, although the US CEO was reluctant to put a timeline to this.
Both partners are thinking really “long-term”, Flipkart CEO Kalyan Krishnamurthy said. The minor blip in Walmart’s share price after the deal was announced reflects the short-term nature of investor concerns, McMillon added.
Neither Bansal nor McMillon expects the deal, which brings in $2 billion of FDI into Flipkart (the remaining $14 billion goes to shareholders including Bansal and his co-founder Binny Bansal) to fall afoul of Indian laws or have problems with regulators.
McMillon downplayed the fact that he hadn’t met with Prime Minister Narendra Modi or any of his cabinet colleagues during the visit and wouldn’t comment on whether a meeting had been sought.
“We meet with government at all levels; we are not new to India; and we weren’t looking for a photo-op,” he said.