Walmart, Flipkart invest in fresh produce supply chain startup in India
Walmart and Flipkart on Wednesday (Dec. 11) announced an investment in Ninjacart, a startup focusing on India’s fresh produce market. Walmart said the goal is to ensure better access to high-quality fresh produce for more retailers and consumers across India, while also creating economic opportunities for farmers.
Terms of the investment were not disclosed, but the transaction is expected to close before the end of the year. By partnering with Ninjacart, Walmart and Flipkart said it will help strengthen direct sourcing of fresh produce for Walmart’s India Best Price wholesale business and Flipkart’s online grocery business Supermart. The investment will also support Ninjacart to expand its customer base, reach new cities and gain exposure to global best practices to enhance the efficiency of the local fresh produce ecosystem, noted the statement.
Founded in 2015, Ninjacart is using supply chain algorithms it developed in-house that leverages big data, predictive analytics, mobile applications and the Internet of Things to power a just-in-time supply chain that connects farmers to retailers via a network of more than 200 collection centers and 1,200 warehouses across India. It moves over 1,400 tons of fresh produce per day, having doubled its volumes in the last four months.
Ninja also uses a paperless supply chain that creates a seamless link between its more 44,000 farmer suppliers and its customer base of 60,000 kirana stores and restaurants across seven cities. Walmart said the efficiency of this system allows Ninjacart to reduce the time for produce to travel from farm to store and to allow transportation at ambient temperature to reduce costs and prevent food waste.
Ninjacart also provides 100% traceability along the supply chain and has slashed food waste to less than 1%, compared to 35% in traditional supply chains.
“Ninjacart’s focus on direct-from-farm sourcing resonates well with Walmart’s commitment to supporting farmers in India. We are working towards our commitment of sourcing 25% of produce in our Best Price cash-and-carry stores directly from farmers by 2023. This would help accelerate market access for them and reduce transportation costs,” said Krish Iyer, president and CEO, Walmart India.
Iyer said the partnership with Ninjacart will help the retail giant create more opportunities for small farmers and boost rural incomes while also improving access to high-quality produce for all members who shop the Walmart’s cash and carry wholesale business throughout India.
Ninjacart said it works with its farmer partners to ensure a reliable supply of quality produce that aligns with market need. It provides data-driven recommendations on what crops to grow and communicates pre-harvest price and demand and pricing information to help create clarity around farmer earnings. Over the last two years, Ninjacart has been able to improve the net realized income of its farmers by 15%, with payments made into farmer bank accounts within 24 hours of produce pickup.
Walmart International CEO Judith McKenna has said the Flipkart acquisition was attractive on many levels, but one of the most appealing was the diverse portfolio of companies within the Flipkart Group. She said Walmart has been committed to improving supply chain access across the highly fractured country. She has said having the local Flipkart connection also gives Walmart access to insights they might not otherwise get. She has said the disruptive Flipkart culture also made it a good fit for Walmart.
Walmart India consists of 27 Best Price Modern Wholesale stores and three fulfillment centers located in nine states across India. The retailer has also integrated business to business e-commerce in all of its stores. Walmart also is a majority owner of Flipkart Group, which includes a growing Flipkart e-commerce business, fashion brands Myntra and Jabong, PhonePe mobile digital payment platform and EKart, India’s largest logistics and supply chain company.