Walmart International Q2 operating income declines 29.6% due to Flipkart

Company News

Walmart International, the segment which consists of the retail giant’s operations outside US including retail websites, on Thursday posted 29.6 per cent decline in operational income on a reported basis and 27.3 per cent decline in constant currency, primarily due to Indian e-commerce firm Flipkart.
The Bentonville-based company (in Arkansas) is locked in a battle with US rival Amazon for dominance in India’s online retail market through Flipkart, which it acquired for $16 billion last year in May.
“Walmart International continued to make progress on managing costs and delivered 36 basis points of expense leverage in the quarter. However, operating income declined 27.3 percent in constant currency and 29.6 percent on a reported basis due primarily to the expected dilution from Flipkart as well as the overall gross margin pressure,” said Brett Biggs, executive vice-president and chief financial officer of Walmart Inc.
In May, Walmart had said its reported international operating income in the Q1 declined 41.7 per cent and went down 37.5 per cent in constant-currency terms was on account of Flipkart.
Doug McMillon, president and chief executive, Walmart Inc., said the ecosystem the company is building through Flipkart is impressive and comprises strong businesses. For example, he said Myntra, a leading online fashion destination, recently concluded their largest sale event of the year – the End of Reason sale – where more than two million customers shopped during the four-day period with 7,000 plus orders per minute at peak.

To help fulfill these orders, the Flipkart team partnered with almost 11,000 local Kirana stores to support last mile delivery, said McMillon. This Kirana partner network helped deliver approximately 70 percent of the 8.5 million packages that were fulfilled during the event, he said...Read More

Soon, Walmart will put groceries right in the fridge while you're out

Company News
Walmart Inc. already sells more food than anyone else. Now it wants to put those groceries right in your fridge.
Beginning this fall, about 1 million people in Pittsburgh, Kansas City, and Vero Beach, Florida, will be able to get cereal and celery while away from home. Walmart staffers -- sporting wearable cameras -- will arrive in company-owned cars and unpack the food in customers’ kitchens.

“Once we learned how to do pickup well, we knew it would unlock the ability to deliver,” Chief Executive Officer Doug McMillon said in a statement. “What if we not only cover the last mile to customers’ homes, but even the last few steps?”

The service, dubbed Walmart InHome, will be led by Bart Stein, who joined the retailer last year and had been working inside the company’s Store No. 8 incubator on a project code-named “Franklin.” The effort follows a small pilot program Walmart conducted two years ago in California with smart-home provider August Home, which used workers from startup Deliv to handle the in-home deliveries.

Fees and other details of the new service, like what smart-home hardware would be required, weren’t disclosed. Walmart currently charges as much as $9.95 for home delivery, which it offers in more than 100 metro areas, with another 200 coming on board this year.
Real-Time Consent


 Employees who deliver the food could be paid a premium, but the approach shouldn’t cost Walmart much more than existing fulfillment methods, US e-commerce CEO Marc Lore said Thursday.One thing Lore and Stein were clear about was that their delivery staff won’t enter any home without the customers’ real-time consent, transmitted through its shopping app.

Flipkart completes a year with Walmart, launches 'Supermart' in Mumbai

Company News

It has been a year since India witnessed the largest M&A deal in its history. Walmart Inc. on May 9 last year had announced it is buying 77 per cent stake in Flipkart for about $16 billion at a valuation of $21 billion. On Thursday, Flipkart celebrated its one-year anniversary of being part of the global retail giant.

However, a lot has changed in one year. Sachin Bansal and Binny Bansal, who started the company in 2007, have both exited the firm. Close on the heels of Binny’s exit, Ananth Narayanan, the top boss of Flipkart’s branded fashion platform Myntra Jabong, also exited the firm.

While Sachin left immediately after the deal went through, which some say was over issues around leadership and control, Binny’s untimely exit came later. In November last year, Binny announced his resignation as chief executive officer (CEO) of Flipkart Group, effective immediately, following an independent investigation into an allegation of “serious personal misconduct”, Walmart Inc. had said.
However, the senior management at Flipkart believes the company has come out a lot stronger after this transition.

“Flipkart’s partnership with Walmart is helping the group better serve Indian customers and accelerate its growth with products and solutions that solve real problems in the country. These include supply-chain infrastructure that is disrupting the industry to benefit local consumers, suppliers, and manufacturers,” said Flipkart Group CEO Kalyan Krishnamurthy.

Walmart’s India push


 In the last few weeks, Walmart’s top bosses have made trips to Flipkart’s sprawling campus in Bengaluru, reiterating their confidence in the company as well as its management.

Walmart CEO unfazed by new e-commerce law; hopeful of future with Flipkart

Companies News:

Walmart, the world’s largest retailer, it was “disappointed with the recent change in law and lack of consultation” with regard to the new e-commerce regulations in India. But, it was confident of the long-term prospects of its India unit, Flipkart.

The Bentonville-headquartered company, which announced its 2018-19 (Walmart follows the February-January financial year) results on Tuesday, got a major leg up from Flipkart in its gross sales, despite divestment of its Brazilian unit. However, its operating income and profitability took a hit due to continued investment in its Indian subsidiary.

“In terms of the regulatory environment in India, we are disappointed with the recent change in law but the team is working to ensure we are in compliance with the new rules. We hope for a collaborative regulatory process in the future. This will result in a level playing field,” said Doug McMillon, president and chief executive officer, Walmart, during an analyst call.

The change in e-commerce policy came into effect from February 1. It bars e-commerce companies from selling products through firms in which they have a stake. Companies operating in this space also cannot earn more than 25 per cent of total revenue from a single platform.

McMillon, however, said the new regulations have not shaken Walmart’s “confidence and excitement” about Flipkart’s long-term prospects as the business has behaved in line with their expectations.


 The company, he said, remained optimistic about India’s e-commerce opportunity, given the size of the market, the low penetration in the retail channel, and the pace at which it was growing.