US retail giant Walmart plans to integrate Flipkart's fashion business after it acquires the Indian e-commerce company as it looks to draw global synergies from the deal.

The companies are discussing a large-scale integration blueprint as talks on valuation are at an advanced stage, people familiar with the matter told CNBCTV-18.

Walmart could bring its own brands, called private labels in retail parlance, such as George and Wonder Nation to the Indian market, and take Flipkart's private labels being sold on its units Myntra and Jabong overseas, the people quoted above said, asking not to be named.

Brands that could see an international debut include Hrithik Roshan's clothing line HRX, All About You, Dressberry and Roadster. George, which would be launched in India, is one of Walmart's largest private label brands.

Flipkart, which owns fashion portals Myntra and Jabong, controls almost 55-60 per cent of the market share in the online apparels space. If the deal works out, this kind of exposure could give Walmart a significant leg-up in the clothing and apparels space.

The medium of sale for these brands overseas as well as the countries of availability will be decided in the future.

Walmart has followed a strategy of increasing the assortment of food and non-food products in its basket.

If this integration works, it could help Walmart compete with rivals such as Amazon both globally, and in India.

Walmart and Flipkart declined to comment on these details.

Walmart, however, said, “As you know we are running Cash and Carry business in India which serves members especially resellers and Kiranas. We also serve HoReCa segment and Office & Institutions through our CnC business.”

The Walmart board is keen to announce the deal before its annual shareholder meet scheduled for May 30-June 1, said one of the persons quoted above, requesting anonymity. The management board of Walmart, led by Doug McMillion, could make a detailed pitch to shareholders in that meeting, laying out the strategic rationale behind the acquisition.

Walmart's aggressive push to buy out Flipkart comes barely two months after its fourth quarter earnings reported a steep decline in its e-commerce growth. During the October to December quarter, Walmart's e-commerce grew by 23% less than half of its reported 50% growth in the third quarter. Investors punished Walmart's stock, which tanked over 10% in trade.

Flipkart's former vice-president Manish Maheshwari said given that Flipkart's IPO did not go through, Walmart's offer gives the e-tailer's existing shareholders an opportunity to cash out. But he added even if Walmart manages to acquire a lion's share of the company, SoftBank is unlikely to exit. "Softbank is in this for the long run. I think they will hold out," he said.

First Published:Apr 18, 2018 11:18 AM IST