Flipkart India bags Rs 2,190.64 crore from Singapore parent
BusinessToday.In December 12, 2018
Less than three months after Flipkart's Singapore-based parent entity pumped in Rs 3,463 crore into the marketplace unit Flipkart Internet - the biggest capital infusion since Walmart acquired a majority stake in the company - it's the turn of its wholesale business arm to bag a fund infusion.Flipkart India has now received Rs 2,190.64 crore from its Singapore parent. The filings made with the Registrar of Companies further show that the allotment was made on December 4 and a total of 7.45 lakh equity shares were allotted at a premium of Rs 29,399 per share.
Flipkart India had last received funding to the tune of Rs 4,472 crore in March. Etailers use their wholesale units as distribution channels that directly source products from brands and supply them to third-party vendors to sell on their online marketplaces. Flipkart and Amazon India's focus on the wholesale B2B business - which spells more control over the quality of products as well as the supply chain - reportedly gained traction following regulatory changes in early 2016 that limited sales from a single vendor to 25% of a digital marketplace's gross sales.
Flipkart's latest investment in its wholesale arm comes a week after its arch rival Amazon India received a Rs 2,200-crore fresh funds boost from Singapore-based Amazon Corporate Holdings and Mauritius-based Amazon.com.Inc, as per regulatory filings. This was the third such investment into Amazon India in the current fiscal, to take on Walmart-backed Flipkart.
According to a recent Barclays report, the arch rivals are neck-and-neck where gross sales are concerned and could burn more than $1.5 billion each in the calendar year 2019 as they continue to pump in more funds to get a bigger share of the red-hot ecommerce pie.
After all, India's ecommerce market is predicted to burgeon over 400% in the next eight years. According to the India Brand Equity Foundation, a Trust established by the Ministry of Commerce and Industry, the market is expected reach $200 billion by 2026, up from just $38.5 billion in 2017.