Timing of Flipkart’s Big Billion Days sale impacted growth in Q4, says Walmart CFO John David Rainey

Timing of Flipkart’s Big Billion Days sale impacted growth in Q4, says Walmart CEO Doug McMillon

Retail giant Walmart saw its growth take a hit in the December quarter due to the timing of Flipkart’s flagship The Big Billion Days (TBBD) sales event, which shifted from Q4 (October-December) last year to majority in Q3 (July-September).

“As expected, the timing of Flipkart’s Big Billion Days event negatively affected year-over-year (YoY) sales comparisons. Outside of India, e-commerce sales grew more than 20 percent across all markets,” Walmart CFO John David Rainey told analysts while announcing the company’s Q4 FY25 results on February 20.

The shift in Flipkart’s sale event resulted in flat growth for Walmart’s overall international revenues. The Bentonville-based retail major’s net sales for this segment in Q4 grew just 0.7 percent YoY to $32.2 billion.

“(International) e-commerce sales grew 4 percent and advertising business grew 10 percent; both affected by the timing of Flipkart’s BBD,” the company said in its fourth quarter earnings report.

To be sure, besides India, Walmart’s overseas markets include those of China, Mexico, and Canada, all of which reported strong growth due to festive events. The company had expanded its presence in India in 2018 after acquiring Flipkart.

In India, the September to November period, which aligns with the festival season, is significant for e-commerce companies like Flipkart and Amazon. In fact, about 50 percent of their annual gross merchandise value (GMV) comes just during those 2-3 months.

Flipkart’s The Big Billion Days sale usually takes place in the month of October (it ran from October 8-15 in 2023), but took place from September 27 to October 6 this year, which bolstered Walmart’s international revenues in Q3. The company had reported an 8 percent YoY increase in net sales for the September quarter.

The shift did, however, contribute to a better gross profit rate for the retail major in Q4, improving by 53 basis points YoY to 23.9 percent during the quarter.

Flipkart is the market leader in e-commerce in India and has been a key unit of Walmart since its acquisition in 2018. It has repeatedly found mentions in the global earnings call and has been singled out as a strong performing unit several times unlike its peers.

However, it is not just Flipkart that is driving Walmart’s growth in India. Its Indian fintech business PhonePe has also now got the ball rolling for an initial public offering (IPO).

"PhonePe, our fintech business, is making preparations for an IPO in India. Our PhonePe team has long aspired to be a public company and we are excited to be taking these early steps," said Doug McMillon, CEO of Walmart, to analysts.

Walmart had acquired PhonePe in August 2018 as part of its acquisition of Flipkart. The fintech major operated as a subsidiary of Flipkart until it separated from the e-commerce firm in December 2022, when it redomiciled from Singapore to India.