We're well-positioned to grow in India, says Walmart CEO Doug McMillon

Doug McMillon, CEO and president, Walmart
Walmart International, the segment which includes the retail giant’s operations outside the US, reported net sales of $35.1 billion, an increase of 6.3 per cent in constant currency in the fourth quarter for FY2021, led by Flipkart in India, Mexico and Canada.

The Covid-19 pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency. Changes in currency rates negatively affected net sales by approximately $0.3 billion. The Walmart team is building alternative income streams to complement its traditional retail business, including advertising.

“In India, our momentum and potential for growth (e-commerce) make this a unique opportunity. E-commerce penetration is still low, but growing rapidly. We're well-positioned to grow as an emerging middle class spends more money through their mobile phones,” said Doug McMillon, president and chief executive officer, Walmart on Thursday night during its fourth-quarter earnings results and meeting with the investment community. “Like the US and Mexico, this (India) is a market where we'll step on the gas to ensure we have the appropriate level of investment in areas like supply chain.”

The Bentonville-based company (in Arkansas) is locked in a battle with US rival Jeff Bezos-led Amazon and Mukesh Ambani-owned Reliance’s JioMart for dominance in India’s online retail market through Flipkart, which it bought for $16 billion in 2018. Digital payments giant PhonePe also came to Walmart as part of the acquisition.

“The PhonePe business continues to grow and perform very well,” said McMillon. “These are homegrown businesses with innovation and solving problem for the Indian customer at their core. We continue to be impressed with Flipkart and PhonePe talent led Kalyan (Krishnamurthy) and Sameer (Nigam).”

Last July, Walmart led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion. Also, PhonePe recently raised $700 million in primary capital at a post-money valuation of $5.5 billion from the existing Flipkart investors, including Tiger Global, led by Walmart. Both the companies are now planning to go public in the U.S in the next 1-2 years, according to the sources.

Brett Biggs, executive vice-president and chief financial officer for Walmart, said the retailer is different from what it was last year or five years ago. He said Walmart is now one of the largest e-commerce companies in the world approaching $100 billion in revenue in the next couple of years and would cross $200 billion in revenue for online retail after that.

“In India, we are the majority owner of one of the largest e-commerce and payments businesses in one of the largest and fastest-growing economies of the world,” said Biggs. “In India, we see significant growth opportunities for Flipkart and PhonePe. It is exciting to see the emerging middle class rapidly adopting e-commerce and using their mobile phones for money transfer, insurance and other services.”

Only 7 per cent of the $1.2-trillion retail market is online, and Walmart-owned Flipkart and its rivals including Amazon and Reliance’s JioMart are aggressively eyeing the remaining 93 per cent. The market opportunities for online commerce in the country are also expected to touch $200 billion by 2028 from $30 billion in 2018.

Walmart’s reported annual revenue of nearly $560 billion, which resulted in $35 billion of growth, an increase of 6.7 per cent. For the fourth quarter, it reported record revenue of $152.1 billion, an increase of $10.4 billion or 7.3 per cent.


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