Flipkart has a $500 million war chest for this holiday season

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Flipkart has a $500 million war chest for this holiday season

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  • Flipkart has received an infusion of nearly $500 million from a holding company in Singapore ahead of its Big Billion Days (BBD) sale in the second week of October.
  • This is apart from the $2 billion capital injection announced by Walmart when it purchased a 77% stake in Flipkart earlier this year.
  • Flipkart will focus on discounts for mobile phones, a category it currently dominates. It reportedly plans to account for 50% of all online phone sales in the month leading up to Diwali in early November.

India’s homegrown e-commerce giant is all prepared to defend its turf this festive season. Flipkart’s online retail platform, Flipkart Internet, has received an infusion of nearly $500 million (₹35 billion) from a holding company in Singapore ahead of its Big Billion Days (BBD) sale in the second week of October.

When Walmart purchased a 77% stake in Flipkart for $16 billion earlier this year, it said that the deal would include an equity infusion of $2 billion.

This $500 million investment seems to be the first tranche of that capital injection, which is aimed at boosting Flipkart’s many businesses in order to fend off inroads from Amazon India and retain its market leadership in the e-commerce space. Amazon, meanwhile, has invested $2 billion in its Seller Services unit alone in 2017-18 and the current year so far.

With regards to the upcoming festive season, Flipkart will use the cash infusion for a number of things. Offering deeper discounts for one, is a huge priority. Flipkart will focus on discounts for sales of mobile phones, a category it currently dominates. With the launch of 20 new models and a buyback guarantee scheme, it reportedly plans to account for 50% of all online phone sales in the month leading up to Diwali in early November.

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In addition, Flipkart will likely allocate a portion of the investment to logistics operations to ensure quicker delivery of goods. It is also planning a big push for the in-house labels on its retail platform like electronics brand SmartBuy and furniture label Perfect Homes.

With roughly $1.5 billion worth of sales from its five-day long BBD programme in 2017, Flipkart was able to beat Amazon. However, the feat might be tougher to pull off this year.

Amazon India is coming in guns ablaze. It just opened a huge order fulfillment centre in the state of Karnataka, its largest in the country, and held a national conference for its sellers this week in preparation for its Great Indian Sale. It recently launched a Hindi version of its retail platform to effectively target Tier III towns and villages and has also cut seller fees in a number of product categories such as clothing and electronics.
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