Walmart on Thursday said its international segment recorded a “solid sales growth” in the July-September quarter, driven by Flipkart.
Walmart on Thursday said its international segment recorded a “solid sales growth” in the July-September quarter, driven by Flipkart. Net sales increased by 1.3% year-on-year to $29.2 billion in Q3 FY20. The US-based retailer’s calendar runs from January to December. “We are excited about what’s happening at Flipkart and PhonePe. The Indian market represents a significant opportunity for growth,” said Doug McMillon, President & CEO at Walmart.
In May last year, Walmart announced purchase of a 77% controlling stake in Indian e-commerce major Flipkart in a hefty $16 billion deal, valuing the e-commerce firm at around $21 billion. Flipkart and Amazon jointly hold close to 80% market share in the country’s e-commerce segment, according to analysts EVP & CFO Brett Biggs said Flipkart completed its best-ever Big Billion Days sales event which resulted in “nearly 75% growth in new customers compared to last year’s event, including good strides in driving growth from tier two cities.”
Festive season sale in India typically starts with the onset of Navaratri. Flipkart and Amazon held their sales from September 29-October 4 this year. According to a report by market research firm RedSeer Consulting, both the firms registered an estimated $3 billion in gross sales during the period.
Walmart’s international operating income, however, declined 46.2% on a reported basis and declined 40.8% in constant currency terms y-o-y during the quarter, primarily due to Flipkart, the retailer said. Gross profit rate also declined 150 basis points on a reported basis, primarily due to Flipkart, it added.
McMillon said Walmart continues to see tremendous growth with PhonePe which is acquiring over three million customers every month. “With over 55 million monthly active users, we are looking for ways to monetise the customer base, including an offering of financial services,” the CEO said. PhonePe competes with Google Pay, Amazon Pay and Paytm in India. A recent report by Razorpay showed about 60% of UPI transactions were carried out through Google Pay in May. The second highest number of UPI transactions came through PhonePe at 23%.
The retailer’s total revenues stood at $128 billion in Q3 FY20 compared to revenues of $124.9 billion posted in Q3 FY19.