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Last month, Walmart completed its $16 billion acquisition of a 77% stake in India’s leading online marketplace Flipkart. Since the acquisition was announced in May, Flipkart has been rolling up companies and has also launched a loyalty program to up its game against Amazon. Let’s take a closer look.
Flipkart’s Recent Acquisitions
In August, Flipkart bought AI startup Liv.ai for an undisclosed sum. Founded in 2015 by former IIT graduates Subodh Kumar, Sanjeev Kumar, and Kishore Mundraan, Liv.ai has built a platform that converts speech to text in Hindi, Bengali, Punjabi, Marathi, Gujarati, Kannada, Tamil, Telugu and Malayalam, among others. Liv.ai had raised seed funding from Astrac Ventures.
Flipkart plans to invest heavily in areas such as artificial intelligence and machine learning to boost its offerings. Last week, Flipkart invested in robotic automation start-up GreyOrange in a Series C funding round of $140 million. Flipkart had been working closely with GreyOrange over the past few years to improve its warehousing capabilities. GreyOrange competes directly with Amazon’s Kiva Systems in automating massive e-commerce warehouses. Amazon had bought robotics company Kiva for $775 million in 2012.
Flipkart’s Private Label Strategy
Flipkart launched its private label SmartBuy in December 2016 to improve its margins. This year, it expects its private label strategy to play a big role in the categories of large appliances, furniture, and electronic accessories. Currently, private labels account for about 15% of all sales in their respective product lines.
For fiscal 2017, Flipkart reported revenue growth of 15% to $2.2 billion (INR 15,813 crore. Losses in 2017 were down 55% to $34 million (INR 244 crore). Smartphones account for about 50% of Flipkart’s gross merchandise value (GMV) while fashion accounts for about 26%.
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