As India eases its lockdown in many regions, the country’s top two e-commerce players – Flipkart and Amazon – are now looking to replenish their war chests. In the latest round, Flipkart received US$ 1.2 billion from its parent Walmart to strengthen its India operation as it takes on its competitors Amazon and Reliance Industries’ JioMart. Barely a week ago, Amazon’s India unit received $308 million from its US parent.
The latest round of investment raises Flipkart’s value to $24.9 billion. Some existing investors also contributed funding, but the company did not reveal their names. Flipkart will receive the money in two tranches over this fiscal year.
Flipkart CEO Kalyan Krishnamurthy said the company will continue to strengthen its platform to attract more shoppers online, pointing out that the company currently leads in electronics and fashion, and is focusing on increasing its share in the general merchandise categories and grocery.
The e-commerce giant recently surpassed 1.5 billion visits per month and reported a 45% increase in monthly active customers and a 30% increase in transactions per customer for the fiscal year 2020. The company said it was giving sellers access to the national market and making shopping easier for non-English-speaking customers by investing in technology such as voice assistants and local language interfaces.
Flipkart’s digital payment arm PhonePe recently reported annualized total payments value of $180 billion on more than 500 million monthly transactions. It claims to have 200 million registered users and onboarded over 10 million merchants. It has also diversified into financial services and offers travel insurance.
Walmart president and CEO Judith McKenna lauded Flipkart for driving growth and providing Indian customers with a “frictionless” option to shop and sell online.
Founded in 2007, the Flipkart Group units include Flipkart, PhonePe, fashion specialty site Myntra and eKart, a logistics and delivery service focused on solving the last mile in India’s small cities. In May 2018, Walmart Inc paid $16 billion for a 77% stake in the group at a valuation of $21 billion and nearly six months later raised it to 81.3%.
Walmart’s country rival Amazon has so far committed $6.5 billion in the Indian market. During a visit to India in January, CEO Jeff Bezos pledged to create one million jobs in the country by 2025 through continued investments in technology, infrastructure, and its logistics network. This is in addition to the 700,000 jobs Amazon’s investments have enabled over the past six years in India.