To ramp up preparation for the upcoming festive season, Flipkart Internet has received over Rs 3,462 crore from Singapore-based entity Flipkart Marketplace. The funding executed in two tranches would help the Bengaluru-based company to record highest-ever Gross Merchandise Value (GMV) during Diwali sales.
The fund infusion is also the first move towards Walmart’s plan of investing $2 billion primary investment into Flipkart. A large part of the latest tranche would be used to maintain Flipkart’s dominance in smartphone vertical.
Since Amazon and Flipkart will be eyeing to achieve total sales in the range of $2.5 to 3 billion, they are set to compete fiercely in terms of dishing out discounts to customers.
Meanwhile, Amazon already had poured in $400 million (Rs 2,600 crore) in its marketplace arm – Amazon Seller Services in May this year.
In its largest round ever, Amazon had made a $450 million (Rs 2,900 crore) infusion in the marketplace unit in November last year while it further recharged the wholesale concern with an additional $300 million (Rs 1,950 crore) in January this year.
Surpassing its $5 billion commitment to Indian play, Amazon also had increased share capital from $2.4 billion to $4.8 billion.
Six months ago, Flipkart had invested $686 million in its wholesale arm – Flipkart India Private Limited. It was one of the largest funding received by any Flipkart unit in recent years. The recent tranche will aid Flipkart in stepping up its ante to take on the US-based Amazon, and Alibaba-backed Paytm Mall in India in upcoming festive season.
Since the sale of smartphones, electronics, and other categories climb up significantly during Diwali sale, the investment would certainly beef up Flipkart’s position against Amazon and Alibaba-backed Paytm Mall. The upcoming festive season would see these trio competing fiercely for dominating more marketshare.
Going forward, it would be interesting to see how Flipkart continues to maintain its lead over rivals Amazon and Paytm in terms of overall GMV during the festive season.
The development was first reported by Moneycontrol.