Many were wondering if Flipkart would become a drag on Walmart’s international operations since the Indian e-commerce venture has been posting losses. However, defying these predictions, Flipkart has contributed 12% to the turnover of Walmart International’s ecommerce segment in terms of revenue.
This is for the fourth of the financial year that Walmart follows of February to January. Overall, Walmart International registered a marginal 2.3% increase in sales for the November 2019-January 2020 quarter. The figure is $33 billion.
The annual turnover figure stood at $120.1 billion, a fraction lower than the $120.8 billion recorded for the previous financial year, 2018-19. The e-commerce segment too sold lower by 5.6% and could do only $1.1 billion.
The company has explained this drop in turnover as due to disturbances in Chile. The remaining markets including Flipkart have been successful, according to the company.
“We remain excited about the opportunity we have in India. The way Flipkart and PhonePe are scaling is impressive," an Economic Times report quotes Doug McMillon, CEO of Walmart as saying in the post-earnings presentation to investors.
Flipkart’s main rival in the Indian ecommerce space is Amazon. Together, Amazon and Flipkart control over 80% of the ecommerce retail business.
The digital payments app PhonePe has been another venture that has added value to Walmart’s operations in India. Walmart is also betting big on the online grocery segment, where Flipkart FarmerMart will be the entity selling fresh foods, fruits and vegetables to customers. Walmart’s experience in the US market should come in handy while Flipkart takes on the likes of Amazon and BigBasket.
Walmart has made it clean on more than one occasion that they value the Indian market highly and that they will stay invested here.