Flipkart Breaks Friendship With WS Retail; Walmart Will Hire 1000 Engineers in India!
WS Retail accounted for 30-40% of Flipkart's sales, at its peak.
There are a lot of development happening from the front of Walmart-Flipkart, as they are consolidating their positions to unleash ecommerce battle in India.
While Walmart has decided to hire 1000 engineers in India, Flipkart has decided to break its friendship with WS Retail, their largest seller for a long long time.
Why has WS Retail parted ways with Flipkart? Read on to know the exact details!
WS Retail-Flipkart Partnership Is Broken
WS Retail, a wholly owned subsidiary of Flipkart Online Services, will not sell any product on Flipkart now.
To avoid breaking FDI laws of India, Flipkart had created WS Retail, and positioned them as one of the sellers in their marketplace.
Since 2015, when Flipkart bought back WS Retail, and started using it heavily to sell products, there have been complaints and protests by other smaller sellers. At its peak, almost 30-40% of all products sold on Flipkart happened through WS Retail, and this was a major bone of contention between Flipkart and smaller sellers.
WS Retail was created as a logistics, retail and warehouse arm of Flipkart.
Amazon too have employed a similar method: Their largest seller is Cloudtail, which is again owed by Amazon India itself.
Now here comes to interesting part: Both WS Retail and Cloudtail have common investors: Rajiv Kucchal,who is a founding member of Infosys and a wealthy HNI, and Narayana Murthy, who is also a founding member of Infosys.
In 2015, when WS Retail was bought back, it had Ankit Nagori (Chief Business Officer at Flipkart) and Rajnish Singh Baweja (Flipkart’s Finance Controller) as Board of Members.
Why WS Retail Is Being Ignored Now?
The reason is India’s new ecommerce policy, and online trade guidelines, which have introduced some really interesting rules pertaining to online sellers on an online marketplace.
One of the most crucial rules is that no seller should be able to control more than 25% of the products sold in an online marketplace, and this clearly changes the dynamics of the ecommerce equation.
25% rule for online sellers makes WS Retail redundant, and maybe this is the reason Flipkart’s partnership has ended with them.
From Rs 13,900 crore revenue in 2016, WS Retail’s revenue decreased to Rs 4600 crore this year.
There has been no reaction from Flipkart on this, but observers say that the decline had started a year ago.
Walmart: We Will Hire 1000 Engineers in India
Walmart has announced that they will hire 1000 engineers in India, to consolidate their position in the cut-throat Indian ecommerce market.
Hiring in the technical divisions has increased, as Walmart and Flipkart are looking at ways to counter the on-coming challenge from Alibaba, Amazon and even Reliance.
As of now, Walmart employs 1800 in India across Gurgaon and Bangalore; and they are responsible for some of the major technological breakthroughs which happened in Walmart. Their entire return process was designed in India, and lots of Internet of Things projects are currently being developed in India.
We will keep you updated, as we receive more details.