Putting all speculation to rest, a senior executive of Walmart has reaffirmed that fashion e-tailer Myntra-Jabong will continue to function independently and there were no plans to integrate it with parent Flipkart.
Walmart’s international division president and CEO, Judith McKenna, was in Bengaluru on a two-day visit where she allayed the concerns of the employees about alignment with Flipkart’s fashion unit, says a report appearing in ET.
McKenna was reportedly joined by Flipkart group CEO Kalyan Krishnamurthy and Amar Nagaram, the head of Myntra-Jabong in addressing the employees.
Earlier, Walmart Inc.’s decision to put Myntra and Jabong under Flipkart had created uncertainty about the direction of the specialty online retailers, which had largely operated independently within the Flipkart Group since Myntra was acquired by the e-commerce firm in 2014.
There has been a lot of churn at the top in Myntra-Jabong since November 2018. Besides the departure of its CEO Ananth Narayanan, Jabong’s staff count was slashed by more than 40 per cent as more than 200 people were asked to leave. This created doubts among the Myntra employees that the stage was being set for the possible merger with Flipkart fashion unit.
McKenna, who heads the $118-billion international business for Walmart and was responsible for piecing together Flipkart deal last year, said that India is viewed as a high growth market where Walmart intends to pour in more funds in future. Some of Myntra’s in-house brands could also go global, she said.
She said that e-tailer was committed to problem-solving through technology, design and innovation.
Along with Myntra-Jabong, Flipkart is estimated to control 60-70% of online fashion sales in India. Its dominance in fashion was a major attraction for Walmart, which agreed to pay $16 billion to buy a 77% stake in Flipkart in May last year.
While the e-commerce players are coming to terms with new FDI norms for the industry, the current year is expected to see a shake-up with the imminent entry of Mukesh Ambani’s Reliance Industries into online retail. Recently, Flipkart has also taken a slew of measures to meet the challenge head-on.