Flipkart pulls Walmart's advertising business and global sales
Flipkart is steadily ramping up its quick commerce offering with Flipkart Minutes, which comes with heavy expenditures in setting up new dark store networks and high customer acquisition costs.
US-listed retailer Walmart saw its advertising business sales grow 20% during the first quarter, led by Flipkart.
The world's largest retailer also saw its global net sales, on a constant currency basis, grow 7.8% to $32.1 billion in the first quarter, helped by China. Flipkart and Walmex also clocked a surge in both unit volumes and transaction counts during the quarter.
However, the international segment's operating income was hurt by growth investments for Flipkart, Walmex and Canada, coming in at $1.4 billion, compared to $1.5 billion in the corresponding quarter in the previous year.
Flipkart is steadily ramping up its quick commerce offering with Flipkart Minutes, which comes with heavy expenditures in setting up new dark store networks and high customer acquisition costs.
This comes after Flipkart Group CEO Kalyan Krishnamurthy said the company aims to set up as many as 800 dark stores by the end of the year, even as it navigates heavy cash burn.
"Walmart has since prioritised international expansion in growth markets with favourable demographic trends, such as India. We look favorably upon the firm’s controlling investment in Flipkart–India’s largest ecommerce marketplace platform, with 45% market share according to Euromonitor–and expect management to prioritise growing its international presence via online channels in the future," Morningstar Equity said in a brokerage report.
The brokerages also see future monetisation from Walmart's India bets, Flipkart and PhonePe, as catalysts for growth.
"When I look at the composition of our markets, a few—like Mexico and Canada—had a relatively weaker backdrop. On the other hand, we made strategic investments in high-growth markets such as India. There were also some one-off calendar-related factors, like the leap year and the timing of Easter, that impacted results," Kathryn McLay, President and CEO of Walmart International, shared in a post-earnings call with investors.
On a consolidated level, the US-listed retail giant clocked 4% year-over-year growth in total revenue at $165.6 billion on a constant currency basis, along with an adjusted profit of 61 cents per share in the December quarter.
Edited by Suman Singh