Flipkart continues to see strong sales growth and an improving trend in the number of monthly active users and customers, Walmart’s chief financial officer and executive vice-president Brett Biggs said on Tuesday.
The US-based retailer, which reported its Q2FY22 earnings during the day, indicated that grocery and fashion segments would be the key growth areas for Flipkart. The e-commerce firm will also continue to build on its supply chain capabilities.
Walmart’s international net sales decreased to $23 billion in the May-July quarter from $27.2 billion in Q2FY21, registering a y-o-y decline of 15.2%. The company said segment sales were “negatively affected by $8.9 billion related to divestitures”.
“Flipkart continues to drive strong growth in GMV (gross merchandise value) in line with our high expectations,” said Walmart president & CEO Doug McMillon while speaking at the earnings call.
Last month, Flipkart raised an enormous $3.6 billion in a fresh funding round from a clutch of investors led by GIC, Canada Pension Plan Investment Board, SoftBank Vision Fund 2 and Walmart at a post-money valuation of $37.6 billion. The fresh capital will be used to fund growth of new product categories, strengthen the firm’s infrastructure and supply chain, besides building on its technological capabilities, Flipkart had said.
A recent report by Bain & Company said India’s e-retail market is expected to grow by 25%-30% annually over the next five years to touch $120-$140 billion by FY26, surpassing modern trade. Flipkart and Amazon command a sizeable share of the local e-commerce market, which is seeing stiff competition from new entrants like Reliance and the Tata Group.
As online commerce expands its market share, local authorities are working on a set of sectoral rules to ensure that there is a level playing field between online and offline retail. Flipkart and Amazon have also come under the CCI (Competition Commission of India) scanner for its alleged anti-competitive business practices.
McMillion said Walmart’s global e-commerce sales are on track to reach $75 billion by the end of the year “further strengthening” its position as a “leader in omnichannel”.