Walmart sheds brick and mortar weight as it plans to go online with Flipkart
Walmarthas put a halt to its expansion plans in India — sacking nearly 56 employees.
- The retailer is shedding brick and mortar weight as it sees no scope in placing physical stores in the country and may go online with
- The development comes in the backdrop of Reliance
JioMart’s debut in the ecommerce space.
- The company’s wholesale business has been suffering losses. The company recorded accumulated losses of ₹2,181 crore as of March 2019, as per Economic Times report.
"We are looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way. As part of this review, we have let go 56 of our associates across levels at the corporate office. All of the 56 impacted associates -- 8 in the senior management and 48 in the middle and lower management -- have been offered enhanced severance benefits and outplacement services to support their transition.” said Krish Iyer, President & CEO, Walmart India.
The retailer sees little scope in adding physical stores in the country. It may put more weight behind Flipkart — which it bought for ₹1.13 lakh crore in 2018. This is as rival Reliance JioMart’s made its debut in the ecommerce space.
“It’s happening because focus is shifting to e-commerce rather than physical (stores),” said the company.
The American multinational reportedly laid off executives including vice presidents across verticals — agri business, FMCG and real estate — at its Gurgaon headquarters. More exits are expected in three months time.
However, the company has denied the anticipations regarding more layoffs. "A report appearing in the section of the Press speculating second round of layoffs in April is baseless and incorrect.," it said.
It also plans to shut a fulfillment centre in Mumbai as the company’s wholesale business is suffering losses. The company recorded accumulated losses were at a massive ₹2,181 crore as of March 2019, as per Economic Times report.
Walmart’s exit from physical stores coincides with Flipkart’s expansion to the food retail segment in India. Flipkart FarmerMart is aimed to sell local products online — directly to consumers. Yet another online-physical combine - Amazon and Future Retail too are bunching their strategies together as they prepare for an onslaught from India’s richest man - Mukesh Ambani and his ostentatious plans to merge his digital capabilities with Jio to his retail venture, JioMart.
"Our members are increasingly becoming omni-channel shoppers. We are thus investing heavily in technology and have a healthy pipeline of Best Price stores. This will provide our members a true omni-channel and convenient shopping experience in the future.," Walmart said.
Walmart entered wholesale business in India in 2007 with the Bharti Group. It currently runs 28 'Best Price' Modern Wholesale Stores — selling to small shopkeepers — across the country. The retail major has over 5,000 employees in India — including 600 based at its head office, Business Standard reported citing sources.
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