The Indian business helped Walmart to win a rare victory in e-commerce over Amazon.
Walmart’s purchase of a controlling stake in Indian online retailer Flipkart in 2018 was negatively criticized. The value of this transaction amounted to $ 16 billion. Many then believed that these funds were wasted, but in the long run, Walmart’s decision brought a positive result.
Abhishek Goyal, the co-founder of Tracxn information company and former executive director of Accel Partners, the first institutional investor of Flipkart, says that the amount of the 2018 transaction is an obvious overpayment, but in the end, the return on the money spent was received. He also noted that at that time there was no other e-commerce company in the world markets, the purchase of which would allow Walmart to compete with Amazon. In his opinion, Flipkart was then the only viable asset.
According to experts, the total volume of e-commerce sales in India will reach $135 billion by 2025. The purchase of Flipkart made Walmart the industry leader in the Indian market.
Flipkart’s market share in 2022 was 48%, and Amazon’s was 26%. The gross sales volume of the Walmart-owned company amounted to $23 billion by the end of 2021. Amazon’s similar figure does not exceed $20 billion.
The media published the news about Walmart’s victory over Amazon thanks to the Indian business a few days after it became known that the total e-commerce sales of the first company increased by 27% year-on-year.
John Rainey, Walmart’s chief financial officer, said last week that the firm’s online market expansion was 40% year-on-year. According to him, the growth of this indicator is due to the fact that the company adds products of well-known brands to its platform, in which buyers are interested. He also stated that these actions increase the credibility of Walmart as a place for digital shopping.
Rainey also noted the growth of Walmart’s e-commerce in India. According to him, this is due to the scaling of Flipkart.
John Furner, president, and CEO of Walmart in the USA, said that the growth in the number of sellers on the trading platform has led to the growth of e-commerce, as the assortment increases in the shortest possible time. He also reported a significant increase in conversion rates when the seller uses fulfillment services and can deliver the goods within two days.
Furner says that in the field of e-commerce, there is an increase in demand for consumer goods, clothing, and some groups of household goods.
Walmart’s popularity is confirmed by Amazon’s data, indicating that third-party sellers provide only about 60% of the company’s sales.
As we have reported earlier, Walmart Closes 4 Chicago Stores After Years of Losses.