Walmart International, the segment which includes the retail giant’s operations outside the US, on Tuesday reported a 1.3 per cent rise in net sales in the third quarter of 2020, led by e-commerce firm Flipkart, Canada, and Walmex (Walmart de Mexico).
The Covid-19 pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency.
Changes in currency rates negatively affected net sales by approximately $1.1 billion. Excluding the currency factor, net sales were $30.6 billion, an increase of 5 per cent. It said strong growth in net sales at Flipkart was helped by a record number of monthly active customers.
The Bentonville-based company (in Arkansas) is locked in a battle with US rival Jeff Bezos-led Amazon and Mukesh Ambani-owned Reliance’s JioMart for dominance in India’s online retail market through Flipkart, which it bought for $16 billion in 2018.
“In India, Flipkart and PhonePe had strong results for the quarter. The number of monthly active customers on these platforms is at all-time high,” said Doug McMillon, president and chief executive officer, Walmart said during it third-quarter earnings results.
In the third quarter, Walmart International reported 70 per cent increase in operating income at $1.1 billion year-on-year. Its operating income in constant currency terms was $1.1 billion, an increase of 79 per cent. Walmart International’s gross profit rate increased 90 basis points, primarily due to Flipkart and reduced sales of fuel in the UK.
Also, e-commerce contributed 14 per cent to net sales, led by omnichannel capabilities. Adjusted operating income was $1.1 billion with an increase of 22.4 per cent YoY. Excluding currency, inventory decreased 5 per cent, due to timing of the ‘Big Billion Days’ event at Flipkart.
“Flipkart continues to perform well and recently completed its best-ever ‘Big Billion Days’ sale event in October,” said Brett Biggs, executive vice-president and chief financial officer for Walmart. “Their third quarter GMV (gross merchandise value) continues to reflect strong demand post-Covid lockdowns, with significant growth and monthly active customers.”
Flipkart witnessed at least 40 per cent growth for its flagship festive sale Big Billion Days, compared to the same event last year, said people in the know. The firm achieved its target in just three days of the week-long sales, which ended last month. In just two days of the BBD, marketplace sellers witnessed the level of growth they had seen during six days of the event last year.
In July, Walmart led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion.
Judith McKenna, president and chief executive officer of Walmart International, said the companies continued to focus on its priority markets globally which include India, China, Mexico and Canada.
McMillon said the company witnessed another strong quarter on the top and bottom line and its associates continued to impress during this challenging year. “They are working together to serve customers and communities in new, relevant ways and we’re very proud of them,” said McMillon.