“Flipkart’s consistent progress and performance reinforces our confidence in the long-term value of this business. India is leading the largest digital transformation in the world, and Flipkart is the leading marketplace in India,” John David Rainey, Walmart’s Chief Financial Officer, remarked during the company’s earnings call on August 17.
Walmart, the parent company of Flipkart and Phonepe, reported a revenue of $161.6 billion and an operating income of $7.3 billion for the second quarter (May-July) of the company’s financial year 2024. The international businesses of the US giant, which comprises Walmex (Mexico), Walmart China, Flipkart, Phonepe, and others, contributed $27 billion in revenue and $1.2 billion in operating income. The company did not disclose numbers specific to Flipkart and Phonepe.
Walmart acquired Flipkart in 2018 for a staggering $16 billion, the largest e-commerce acquisition at the time. The acquisition also resulted in Walmart owning fintech major Phonepe, which was acquired by Flipkart in 2016, and online fashion retailer Myntra, which was acquired by Flipkart in 2014. The bet seems to be paying off as the US giant appears to be impressed with the results of Flipkart and Phonepe as well as optimistic about their future.
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What was said during the earnings call?
- Flipkart delivered strong GMV and net sales growth: “In India, Flipkart delivered strong GMV [Gross Merchandise Value] and net sales growth as the core business continues to perform well. The team continues to focus on expanding the ecosystem of products and services like advertising, travel, and healthcare and on delivering continued contribution profit improvement,” CFO John David Rainey remarked.
- Phonepe processed more than 5 billion transactions in a month for the first time: “We continue to be super impressed with PhonePe’s strong and consistent performance. Annualized TPV, or total payment volume, has surpassed $1.15 trillion. And for the first time, we processed more than 5 billion transactions in a single month,” Rainey added.
- MyFashionGPT capability on Myntra showcases the power of what AI can do for us: Myntra has just “launched a MyFashionGPT capability as well, which is quite incredible. And I used it this morning. I put in, ‘What to wear to go to the airport?’ And they gave me, a black T-shirt, black leggings, a jacket and sunglasses, which I think was rather optimistic using the sunglasses for England. But it shows you the power of what I think gen AIs can do in the future. And it’s really coming to life in India,” McKenna recounted.
- Myntra now has more than 6000 brands: “Flipkart Myntra is the country’s largest e-commerce marketplace for fashion and lifestyle products, offering top brands to customers across India. Myntra now provides access to more than 6,000 brands on its marketplace,” Rainey said.
- Flipkart continues to go from strength to strength: “If we’re talking about e-commerce and marketplace, it would be particularly remiss of me not to talk about Flipkart and the growth that we’ve seen there. We were there as well recently. And that business is just continuing to go from strength to strength. It’s consistently performed in line with our expectations over the last few years. I’m really pleased to see the positive contribution margins continue. And then their business mix is really quite healthy, so seeing strength in hardlines, particularly across mobile and electronics as well. The scaling of their ecosystem is also helping contribute not only to the overall business but also to their advertising revenues well,” Judith McKenna, President and Chief Executive Officer of Walmart International, said.
Using AI to make shopping easier and to improve worker productivity:
“Our approach to new tools like generative AI is to focus on making shopping easier and more convenient for our customers and members and helping our associates enjoy more satisfying and productive work. Ultimately, the power of generative AI or e-technology is only as good as the data that powers it. Our data assets are unique, and we’re excited about the potential to leverage them in new and impactful ways.
We’re taking large language models developed by our partners and by the broader tech community and adding retail context to create models that are uniquely suited to the needs of our customers, our associates, and our supply chain.” — Doug McMillon, CEO, Walmart
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