“I believe India will become the largest market in the world this year and surpass China. It’s really a promising opportunity in the future,” Rainey, who is also the executive vice president of Walmart Inc, said at the annual institutional investor meeting. from the company. phone call.
He said e-commerce marketplace Flipkart and online payment app PhonePe, both owned by Walmart, are industry leaders and both companies have huge opportunities to profit in the future. Rainey was responding to an analyst’s question about the company’s international markets.
Rainey’s comments come on the heels of the company’s earnings two weeks ago, when he said Walmart’s international business took a hit because of PhonePe’s split from Flipkart.
On the earnings call, Rainey also said that Flipkart’s positive contribution margin has improved and that Walmart has taken note of the Indian e-commerce giant’s progress.
A positive contribution margin means that the product sold at a certain price is able to make contributions or generate money after deducting fixed costs.
Discover the stories of your interest
Walmart International, which includes Flipkart, reported net sales of $27.6 billion for the quarter ended December 31, 2022, growing just over 2% year-over-year. In December, both Flipkart and PhonePe said they were formally separating, and the payments company has since raised $450 million in new funding from investors such as General Atlantic, Tiger Global, Ribbit Capital and TVS Capital Funds.
The separation and subsequent shift of PhonePe’s registered legal entity from Singapore to India also resulted in Walmart paying a $1 billion tax bill to the Indian government.
PhonePe is also in the process of raising $1.5-2 billion in funding with Walmart and private equity General Atlantic contributing about $1 billion, with the rest being a secondary sale.
ET reported on Nov. 29 that Flipkart will facilitate a $700 million share buyback for employees as part of its ongoing funding round of digital payments platform PhonePe.
On December 23, Flipkart CEO Kalyan Krishnamurthy informed employees via an internal memo that anyone who owns stock options in Flipkart will be paid in cash equal to the value of PhonePe within those holdings, as the digital payment platform is no longer part of the ecommerce. company.
The entire transaction will also trigger a valuation adjustment of Flipkart to approximately $33 billion from $37.6 billion previously, as PhonePe will no longer be part of the Flipkart group, which also includes fashion e-commerce company Myntra and the online travel portal Cleartrip.
Like other tech companies around the world, Flipkart too has cut costs as the industry is going through one of its toughest downturns.
ET reported on Feb. 23 that the top 30% of the company’s employees, including senior management, will not receive any raises this year.
The change in the annual appraisal cycle was communicated to employees by Flipkart’s chief people officer Krishna Raghavan in an internal memo, which ET had reviewed.
Raghavan said the company wants to be “cautious” in managing its resources in difficult macroeconomic conditions.
Globally, Walmart reported $164 billion in total revenue in the fourth quarter, up more than 7%.
Walmart reported 17% growth in its US e-commerce business in the fourth quarter.