Flipkart’s Singapore parent infuses Rs. 4500cr into India wholesale arm

3 min readUpdated Jun 4, 2025Mar 5, 20186:30 AM

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the wholesale arm of the country’s largest e-commerce company, has received almost Rs 4,500 crore in what is one of the largest capital infusions for the entity, as per latest regulatory filing at the Registrar of Companies (RoC). This large investment in to the wholesale arm from its parent indicates the aggressive plans that Flipkart has charted out to counter its closest rival Amazon which too runs a wholesale arm. Since raising $4 billion from marquee investors like SoftBank last year, Flipkart has been largely been pushing its logistics and payments businesses adding big bucks to rev up these verticals.

Flipkart India is one of the core companies that controls the e-tailer’s India operations. The wholesale arm buys products in bulk from various manufacturers and then sells it to merchants who work closely with the online retailer as well as to independent third party vendors. These merchants, in turn, sell these products to consumers on the Flipkart platform. Flipkart Internet is the other significant entity which runs the marketplace for the e-commerce major. This entity too received an investment of about Rs 370 crore recently.

In March 2016, the Indian government allowed 100% FDI in online retail of goods and services under the marketplace model with riders which restrict a seller from contributing more than 25% of overall sales generated on any e-commerce site. This is why companies like Flipkart and Amazon, which cannot work on the inventory model, prop up few big merchants and help them cater to the growing consumer demand. Having a wholesale arm helps in doing that as they e-tailers cannot directly sell to shoppers. As per the RoC documents, Flipkart’s Singapore parent was issued each share of Flipkart India for Rs 23,900 for raising the new capital.

An email sent to a Flipkart spokesperson on the development did not elicit a response. The e-tailer’s wholesale entity reported revenues of Rs 15,264 crore for the financial year 2017 compared to Rs12, 818 crore in the previous year showing a growth of about 18%. After a tough 2015- 2016, Flipkart had managed to make a turnaround last year with a bump up in growth numbers on the back of smartphone sale. It also successfully raised massive funds to fight Amazon as Japan’s SoftBank came on board as its largest investor.

Both Amazon and Flipkart are vying for the largest pie of the Indian e-commerce market and are investing in their businesses at a staggering pace. Amazon has already infused over $3 billion in the Indian market and its international losses–majority of which is credited to India–stood at $3 billion for the full year of 2017. Flipkart Singapore parent reported a 67% jump in losses at Rs 8,771 crore for the financial year ending March 2017. Both the players are also ramping up their infrastructure for new businesses as they look to drive up growth. While Flipkart is setting up new fulfilment centres for its TV and large appliances business, Amazon recently announced it has opened up 15 new warehouses or what it cals Fulfillment Centres to push its grocery and daily consumables business.

Flipkart is currently engaged in talks with Walmart, the world’s largest offline retailer, for a deal that may give the American retailer a big stake in the homegrown comoany valuing it at upwards of $20 billion, as TOI reported in our February 8 edition.

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What this means

This substantial capital infusion into Flipkart's wholesale arm directly addresses the complex FDI regulations in India, allowing the e-tailer to indirectly control inventory and compete effectively against Amazon. This strategy mirrors Amazon's own aggressive investment of over $3 billion in the Indian market, where both rivals are expanding infrastructure, like Microsoft's new cloud region in Hyderabad, to support growth. The move puts significant pressure on smaller players and ensures Flipkart can scale its product offerings. The primary risk lies in the ongoing heavy investment leading to increased losses, as seen with Flipkart Singapore’s 67% jump in losses last year. We need to watch for the outcome of Flipkart's reported negotiations with Walmart, as this could fundamentally reshape the Indian e-commerce landscape.

Aiko Tanaka · Retail News Asia newsroom

Questions & Answers

Why is Flipkart investing such a large sum into its wholesale arm?

This investment indicates Flipkart's aggressive plans to counter its closest rival, Amazon, which also operates a wholesale arm. The wholesale arm helps Flipkart comply with FDI rules by supplying merchants who then sell to consumers.

How do companies like Flipkart and Amazon navigate the Indian government's FDI regulations for e-commerce?

They use a marketplace model, where a seller cannot contribute more than 25% of overall sales. Their wholesale arms buy in bulk and sell to third-party merchants, as e-tailers cannot directly sell to shoppers.

What was the financial performance of Flipkart's wholesale entity in the last reported financial year?

The wholesale entity reported revenues of Rs 15,264 crore for the financial year 2017. This was an 18% growth compared to Rs 12,818 crore in the previous year, 2016.

What other areas has Flipkart been investing in recently?

After raising $4 billion last year, Flipkart has largely focused on pushing its logistics and payments businesses. It is also setting up new fulfilment centres for its TV and large appliances business.

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