Ahead of the festive season, Flipkart Internet, the online marketplace arm of Indian ecommerce company Flipkart, has received more than $475.75 Mn (INR 3,462 Cr) from Flipkart Marketplace, Singapore.
According to regulatory documents, the fund infusion was done in two tranches.
Regulatory documents filed with the Corporate Affairs Ministry said: “…in accordance with the Letter of Offer dated 14 August, 2018 circulated by the company for the rights issue of shares, the board of directors of the company be and hereby allot 14,57,598 Class A equity shares…for an amount aggregating to ₹30,07,02,46,740 for cash to Flipkart Marketplace Private Ltd, Singapore.”
The resolution was passed at a board meeting held on August 30, 2018. The board, during the meeting, also passed another resolution (in accordance to a Letter of Offer dated July 18) for allotting 2,21,002 equity shares for INR 455.92 Cr for cash to Flipkart Marketplace, Singapore.
The funding is expected to help Flipkart amp up its game against its arch-rival and global player Amazon. The company also plans to add more exclusive partnerships and expand its collection of globally recognised labels in the coming months.
Related Article: Flipkart Gets $225 Mn Boost Ahead Of Festive Season Sales
Ecommerce Cos Gear Up For Festive Sales
In recent years, festive sales that start in October have become an annual showdown for major ecommerce players in India. With neck-on-neck market share of 31.9% (Flipkart) and 31.5% (Amazon), the duo do major prep for the festive sales, putting up several deals and exclusive content, getting into partnerships, etc, to attract new customers and retain old ones.
Research firm RedSeer consulting noted that about 20 Mn people are expected to shop on various ecommerce platforms during the festive sales next month, translating into sales of around $41.26 Mn (INR 3 Bn) for players like Amazon and Flipkart.
Last year, the ecommerce sector saw its highest-ever sales performance over the five festive sale days from September 20-24. The RedSeer analysis showed that the industry managed to generate $1.5 Bn sales ( INR 9,000 Cr) in 2017, a year-on-year growth of 40%.
With the October sale in mind, Flipkart’s biggest rival, Amazon India, has reportedly reduced both its storage charges as well as seller fees in five categories in order to encourage vendors to stock more products. Earlier, Flipkart reduced its commission in low-priced categories in August 2018.
Amazon had started out in India with a 14% share in 2015 against 43% of Flipkart. Citi Research estimates that Amazon India is currently in second place in the Indian ecommerce market with about $5 Bn in GMV.
Recently, a group of online sellers affiliated to Flipkart requested the country’s fair trade watchdog — the Competition Commission of India (CCI) — to restrict large sellers from participating in its five-day Big Billion Days sale.
With Flipkart buoyant with Walmart’s $16 Bn acquisition of a 77% stake in the company and Amazon having committed a $5 Bn investment in India completion is at an all-time high between the duo and the festive season sale is the battleground where the face off will happen.
[The development was reported by PTI.]