Flipkart India receives fresh funding from parent entity prior to sales season

As India’s festive season approaches, e-commerce companies are flexing the muscle to out-do the competition

Photo by Igor Miske on Unsplash

Flipkart India, the wholesale arm of Walmart-owned Flipkart has received fresh capital to the tune of USD 225 million from its Singapore-based parent company Flipkart Private Ltd., according to regulatory filings.

The development comes ahead of the Big Billion Days (BBD) sale starting September 29 to October 4 where sources have tipped a local newspaper The Economic Times that the e-tailer expects to do sales worth USD 3 billion. This is the second fund infusion into Flipkart India from its Singapore entity this year, after it received close to USD 200 million in January.

As a wholesale unit, Flipkart India purchases products in bulk from manufacturers and sells them to preferred sellers.

Right now, e-commerce giants Flipkart and Amazon are out to claim the largest share of the consumer spend online during this festive season. Both are leaving no stone unturned to woo shoppers with attractive schemes in a run-up to their annual shopping fests. Amazon’s version is the ‘Great Indian Festival’.

Apart from their respective flagship sale, both the e-tailers till December will run different sale offers such as exclusive launches, special promotions, and discount deals. Discounts during the festive season go as high as 70-90%, which physical retailers have protested against at multiple occasions, making the government revise its foreign direct investment (FDI) rules for e-commerce marketplaces last December.

Among several new restrictions such as banning exclusive partnership with brands and offering “deep discounts”, e-commerce companies can’t source product from a merchant or seller in which it owns equity. Amazon and Flipkart have found ways to maneuver around the new rules and have started sourcing goods from B2B units and a major chunk of the inventory is sent by brands directly to the sellers.

Flipkart wants to capture the next 200 million internet users in tier 2, 3, and 4 cities of India. It has also tied-up with 27,000 mom and pop stores across 700 Indian cities to bolster its distribution network ahead of the festive season spanning three months from October to December. Festive sales are expected to peak 25-27% over the normal shopping season this year.

Incidentally, Flipkart had promoted five senior directors across various verticals as vice presidents ahead of the BBD sale.