Walmart merges its Indian wholesale business into Flipkart

India has been a bit of disappointment for Walmart in past years, but that changed when the retail giant acquired a majority stake in Flipkart in 2018 for $16 billion. On Thursday, Flipkart announced it was acquiring Walmart’s cash and carry assets for an undisclosed amount.

The deal includes 28 wholesale stores, two fulfillment centers and more than 1.5 million members which is primarily very small businesses. Flipkart said it will launch a digital wholesale marketplace next month with the assets from Walmart.

Walmart has run the wholesale cash and carry business since 2009 and tried various measures to improve the business from management changes to abandoning its joint venture partnership with Bharti in 2013.

Flipkart said the deal allows it to strengthen its wholesale offerings and better compete in the diverse and expansive market of more than one billion consumers. Amazon has expanded its presence into India and local grocery startup JioMart that is making a splash and creating a competitive landscape for Walmart at its smaller scale in the large country.

Walmart, which has operated Best Price wholesale cash-and-carry stores in India since 2009, bought a controlling stake in Flipkart in 2018 for $16 billion. The employees at Walmart India will join the Flipkart Group which is based in Bangalore, the capital of India’s southern Karnataka state.

India has been a rough place for outside retailers as it does not allow foreign investors to control and market their own inventory on proprietary e-commerce platforms. Flipkart is local to India and does not face the same hurdles as Walmart. This news comes on the heels of a Walmart-led $1.2 billion investment into Flipkart announced July 13.