Despite having an 11% increase in Walmart revenue for FY’19 at Rs 4,065 crore, the Indian unit of brick-and-mortar store retail giant has registered a net loss of Rs 172 crore YoY for the year ended March, according to data sourced from Tofler.
The company stated,
“We continue to build capabilities for the future through investments in revamping our technology infrastructure to enhance our omnichannel capabilities and in people development. The increased losses during the year under review reflect the investments that we are making to drive our future growth.”
Walmart, unlike its other chains, doesn’t sell directly to the consumers in India and is an organized wholesaler that sells merchandise to the local Kirana stores, hotels, and catering companies. It operates 25 wholesale cash-and-carry stores named ‘Best Price Modern Wholesale’ and a membership-based program that counts more than one million members. It is available in all the major metro cities, including Walmart Bangalore and Walmart Hyderabad. The state holding the maximum stores of Walmart venture Best price is Punjab with six stores across the state.
Walmart in India has also set up two fulfillment centers in Lucknow and Hyderabad. The company sources its catalog from smallholder framers and regional suppliers and sells it to the local stores, hotels, and catering companies. The company declared its willingness to spend approximately $500 million to open another 47 stores in India by 2022.
Walmart India’s investment streak
Walmart forayed into the Indian marketplace in 2009. It took over the Binny Bansal and Sachin Bansal founded ecommerce platform Flipkart by buying a 77% stake in the company at $16 billion, in May 2018, making it one of the biggest acquisitions in the Indian ecommerce industry by far.
In November 2018, Walmart increased its stake to 81.3% by buying partial or full stakes from Flipkart’s previous investors namely, Tencent, Tiger Global, Binny Bansal, Microsoft, Accel, Iconiq Capital, Temasek, SoftBank, Naspers, eBay, and UBS.
In September 2018, Walmart Labs brought an entire team of engineers on board that had built a system of micro-apps to get hosted and streamed on any platform, from Bengaluru-based Appsfly.
Following an array of investments, the company then went ahead to acquire Deleware-based data analytics and machine learning startup Int.AI to help strengthen its Indian engineering team.