Adani seeks to expand Flipkart partnership
MUMBAI: Adani Group and Walmart Inc.’s Flipkart unit are in advanced talks to expand their partnership beyond warehousing and data centres into new domains, including wholesale e-commerce and sourcing of groceries and household goods, two people with direct knowledge of the matter said.
“Adani could enter into a new agreement with Walmart for a strategic partnership, under which Flipkart could sell a range of products, and a revenue-sharing agreement will fetch income for both Adani and Walmart on a proportionate basis,” said one of the people cited above, seeking anonymity.
The partnership will not only provide Flipkart with a wider array of products that it can sell to retailers but will also bring in new wholesale customers who are associated with Adani Group entities in the packaged goods and consumer durables businesses, the person added.
“Both Adani and Flipkart will jointly manage the sale of goods on a wholesale basis to shops and business owners as per the proposed agreement. The partnership is a part of Adani’s strategy to increase its presence in the e-commerce space,” said the first person.
Walmart carries out its online wholesale business in India through Flipkart Group’s business-to-business arm Flipkart Wholesale. Flipkart Wholesale’s FY21 revenue rose 25% to ₹42,941 crore from the previous year and loss narrowed 22% to ₹2,445 crore.
Earlier this year, Flipkart Pvt. Ltd, the e-commerce major’s parent entity incorporated in Singapore, infused $233 million in the wholesale arm of the business, Flipkart India Pvt. Ltd (Flipkart Wholesale).
Flipkart Wholesale caters to more than 1.5 million clients across India, including kiranas, hotels, restaurants, cafeterias, offices, and institutions.
On January 18, Flipkart announced that it would reorganise its business operations to reduce costs and increase investments. As part of the reorganisation, all Flipkart Wholesale
employees (except those in core merchandising and operations) will transition to their respective roles at the group level in Flipkart. Emails sent to spokespeople for Adani Group, Flipkart, and Walmart remained unanswered.
“The latest partnership being planned with Adani Group will entail reorganization of resources at Flipkart Wholesale, and Adani Group may provide new large storage and distribution facilities for FMCG products at locations where Flipkart is yet to gain an optimum market share. This may help Flipkart gain a large number of new customers in the wholesale space. On the other hand, Adani will get an active e-commerce business and gain from the revenue generated from the wholesale business on Flipkart,” the person said.