Flipkart gross merchandise value (GMV) exceeds pre-Covid-19 level: Walmart

Mumbai: Gross merchandise value (GMV) at etailer Flipkart has exceeded pre-Covid levels since it resumed operations three months ago, said its US parent Walmart Inc, the world's biggest retailer.
“It was nice to see once the government restrictions start to get lifted, how the volume came back. We are staying close to the decisions that they are making and excited about the strategy going forward,” Walmart CEO Doug McMillon told investors while declaring second quarter earnings.

While its overall revenue increased 5.6% year-on-year in the quarter to July, the retailer posted a 6.8% drop in international business sales which it blamed on government mandated closures in India, Africa and Central America. Walmart’s financial year runs from February to January.

Last month, Walmart led a $1.2 billion investment in Flipkart Group, valuing the company at $24.9 billion, about 19% higher than when it sold a majority stake to the US retail behemoth two years ago.

“We are not really getting hung up on valuation in the short term, and over time, I think everybody will understand just how valuable that business in India is whether the Flipkart portion or Phone-Pe portion,” said McMillon, answering an analyst’s query on the reason for lower valuation compared to what the market was expecting.

“With the investment, we just wanted to make sure that they have got enough room and enough cash to operate. And this is a time when there’s so much of an opportunity that the size of India is significant. We want to make sure that we are on our front foot, being aggressive.”

The Indian ecommerce market is still in its relative infancy, at $71 billion GMV, according to UBS which expects it to grow to $350 billion by 2030, a 17.3% annual growth rate.