While Flipkart’s annual Big Billion Day sales helped boost US retail major Walmart’s sales in the quarter ending January (Q4), it hurt the company’s profit margin for the period.
Flipkart's latest edition of its annual festive sale event, called Big Billion Day, in October 2023 was the 'largest ever', with 1.4 billion customer visits to the platform, a top Walmart executive told analysts in an earnings call.
He said that Flipkart’s growth continues to compound in the double digits while Phonepe is now processing over 6 billion monthly transactions. PhonePe has reached 1.4 trillion in annual total payment volume, about 40 percent higher than a year ago.
It was also the first time that Walmart crossed $100 billion in global e-commerce sales, he added.
Walmart owns both Flipkart and PhonePe.
The retail major saw its international sales grow 13 percent to $31.2 billion in Q4, led by Flipkart, Walmex and China helped by strong growth of festive events.
However, its gross profit margin dropped by 39 basis points due to the timing shift of Flipkart's event from Q3 in FY23 to Q4 in FY24.
The company said that Walmart International’s advertising business grew 76 percent led by Flipkart and its Mexico business.
Walmart earned $5.49 billion, or $2.03 per share in the quarter ended January 31. That compares with $6.27 billion, or $2.32 per share, in the year-ago quarter. Its adjusted earnings stood at $1.80 per share, while sales rose 5.7 percent to $173.38 billion.
Analysts were expecting $1.64 per share on sales of $170.85 billion, according to FactSet.
Walmart-owned Flipkart let go of around 1,000 employees, which represents around 5 percent of its total workforce, as part of its annual performance review exercise, Moneycontrol reported in January.
Multiple senior executives have left the Indian online retailer or are on their way out as Flipkart CEO Kalyan Krishnamurthy pushes for better execution to turn the e-commerce giant profitable.
Meanwhile, Flipkart is planning to address its customer velocity problem, aiming to boost user frequency on the app by introducing bundled products such as financial services. The e-commerce giant aims to transform into a commerce company, shifting from being solely an e-commerce entity.
“If you just look at the gap between the people who bought once, which is let's say 500 million versus people who buy monthly, there is a massive opportunity there. A lot of our focus goes towards bridging that gap. That is the big opportunity we see,” Krishnamurthy told Moneycontrol in an exclusive interview last month.
The focus is not to expand its 500 million users but to solve for customer velocity, he said.
“We are not focused on expanding that 500-600 million to 800 million And a lot of things which we do about travel and health and financial services, all of those are in that direction,” Krishnamurthy said adding that the firm will be a commerce player, even 10 years down the line, we will continue to be hopefully an influential and a scaled-up commerce player”.
(with agency inputs)
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