Walmart said it is impressed by its companies in India, including e-commerce major Flipkart, digital payments firm PhonePe and online fashion retailer Myntra, as they have performed in line with the US retail giant’s expectations. Walmart International CEO Judith McKenna said Walmart is really pleased with Flipkart’s performance as its monthly active customer grew by 45 per cent, transactions per customers were up 30 per cent and the firm tracked over a billion visits per month.
The Bentonville (Arkansas)-based company 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 in 2018.
“We made an investment there (Flipkart) 18 months ago and we continue to be impressed, with the teams that have a strong culture and the way they operate,” McKenna said during the 2020 Investment Community Meeting. “I have been to India five times last year and I never cease to be amazed by the energy, the spirit and the entrepreneurship of the folks of our business.”
She said the engagement with Flipkart is continuing to grow as Indian customers become comfortable with the convenience and availability it provides. Only 10 per cent of families in India own a smart TV, washing machine or an air conditioner and when they are sold on Flipkart, the company is teaching the customers to use those new products and that in turns drives confidence in the firm.
“I can tell you the health of the platform (Flipkart) is strong. Their strategy is simple (which) is to democratise shopping by providing affordability and access,” said McKenna.
McKenna mentioned that Flipkart is building innovations tailored for the Indian market such as voice-assisted transaction capabilities in vernacular language and fintech constructs to increase access to credit and affordability options for shoppers which is helping the company tap Tier-2 cities.
McKenna also said that the other company PhonePe’s journey is remarkable and their ambition is to be India’s largest transaction platform anchored in payments. The Sameer Nigam-led firm has some 200 million registered users, 20 million daily active users and 500 million monthly transactions. The company also achieved annualised total payments value (TPV) of $180 billion and has 10 million merchants.
“This business is just three years old,” said McKenna. “It took the business (PhonePe) two years to reach the one billion-transaction mark. Last year, it crossed five billion transactions. We are really excited about its future.”
McKenna also highlighted the innovations created by PhonePe including building an Automated Teller Machine (ATM) network which enables neighbourhood stores to act as ATMs for PhonePe users. This month the company said it will by the end of this year create an ATM network of 2 million. Subscribers use the PhonePe app to locate shops offering the ATM service, which is important at a time when India has 200,000 ATMs that frequently run out of cash.
McKenna said Walmart avoids rigid approach to ownership and is leveraging strategic partnerships wherever they can make the company’s business stronger. She said success in today’s environment means that one needs to have a multi-local approach. “We are building strong local businesses and strongly unlocking the power of Walmart.”
During the 2020 Investment Community Meeting, Walmart president and CEO Doug McMillon said that Flipkart and PhonePe are scaling up quickly. "They have a ton of runway ahead of them as we build platforms that support ‘kiranas’ and small businesses,” said McMillon.