Though the Flipkart deal took place only recently, Walmart is not new to the Indian market. It has been involved in the cash and carry segment for many years. But the foreign direct investment (FDI) regulations allows only 51% in multi-brand retail, whereas in cash & Carry 100% is permitted. And the Indian arm has developed its own private brands over time, Right Buy and Member’s Mark. Flipkart too, has developed private brands like Billion though not exactly in the grocery segment.
Walmart India now wants to cross-sell each other’s private brands hoping to get the best out of the association, according to this report in Economic Times. The report quotes Krish Iyer, the Chief Executive at Walmart India as saying that they are currently offering their brands in their retail outlets (cash & carry format) and would be keen to see them going on sale on Flipkart.
The only hitch for them is that Walmart or Flipkart are not permitted to sell their products directly to consumers either in the brick and mortar stores or on the online platform. But they can definitely sell it to a retailer who can then upload it on the site. But the benefit for both the sellers and the consumers with the private brands over the popular brands in any category is definitely there and that is one reason almost every company is busy launching their private brands all over.
Walmart recognises the work done by Flipkart with the use of technology, developing better analytics and so on. These will be leveraged while working together now that Walmart owns 77% in the ecommerce firm. But they also hasten to add that the process will take time to playout in the market. The effort would also be at the parent company helping out with the marketing of grocery products bringing on its own experience in the US. The resellers, on their part, would also be keen to get the best out of the situation.