Walmart, which famously acquired Flipkart in 2018 and pumped in a further 1.2 billion in July 2020, seems to be not just happy with the way things are happening in the company but is also taking lessons from India's e-commerce platform. The learnings are in the context of Walmart's e-commerce market foray in the US, where the pace of its online growth has slowed dramatically to 6% from 37% in the first quarter.
"We’ve definitely seen a transformation in the way the businesses are thinking. India is slightly different because Flipkart, of course, and PhonePe, our payments business there have always been digital-first. And we’ve learned an awful lot from them. And I’m so encouraged by what I’m seeing out of India," Walmart International president and chief executive Judith McKenna said in the company's quarterly earning call yesterday.
- PhonePe and Flipkart join forces to digitise cash-on-delivery payments
- Survey says 49% of Indian consumers prefer e-commerce shopping
Optimism on future growth, too
Continuing to heap praises on Flipkart, Judith added: "You’ve got to remember, this is a market where digital penetration was really quite low when we made our original investment. And that has just continued to increase. And we were really pleased to see the $38 billion fund raise for India that we did recently. And the quality of the investors that we’ve got there, I think, is testament to the way that that business has a future growth trajectory as well.
Judith said the company is now focusing on the holiday season. "In India, we’re prioritizing Big Billion Day, which is the Diwali Festival, which is coming up in early November."
This Big Billion Day sale is crucial for Flipkart as it comes on the back of some restrictions that the Indian government has announced for certain types of flash sale.
To invest in fashion and grocery
Walmart president and CEO Doug McMillon, for his part, said they would put the "dollars" they got through recent funding "to work to deliver growth in key areas such as grocery, fashion and our supply chain."
In general, he also sounded pleased with Flipkart's show over the last year, despite obvious difficulties. "Our eCommerce marketplace in India, Flipkart, continues to drive strong growth in GMV, in line with our high expectations," he said and added: "They introduced Flipkart Camera, a first-of-its-kind technology at scale for the Indian customer that allows users to view products in their physical environment, expanded their grocery business to over 70 cities and launched a new commerce platform called Shopsy to help reach the reseller community. They’re also increasing customer stickiness with Flipkart Plus."
Brett Biggs, Executive Vice President and Chief Financial Officer of Walmart, said Flipkart had another good quarter. "Sales growth was strong even as they dealt with Covid, and we continue to see improving trends in monthly active customers and users. We were excited to take another step to position the Flipkart Group for future growth with the completion of a $3.6 billion funding round in July."
