US retail giant Walmart on Tuesday told investors that limited operations of Flipkart for a portion of the quarter that ended April 30, counteracted some of the growth in sales of its international e-commerce business which was driven by strong demand for online sales in the UK, China, Canada and Mexico.
“Limited operations of the company’s Flipkart business in India for a portion of the quarter negatively affected growth,” Walmart said in its Q1 earnings presentation to investors.
Flipkart saw a massive drop in sales at the end of March and for all of April as it was restricted by the Indian government from shipping anything apart from food and groceries to consumers. Analysts tracking the space told ET that groceries and food made up a very small percentage of Flipkart’s business.
Reiterating this sentiment, Doug McMillon, President and CEO of Walmart, said on a conference call with analysts that its Flipkart operations were impacted by restrictions of sale of non-essential goods.
The Bentonville, Arkansas-based company said that e-commerce accounted for 9% of its international sales, which grew by 3.4% to $29.76 billion in Q1. Growth was driven by categories such as groceries and consumables, but was partially offset by a dip in sales of apparel and general merchandise, the company added.
However, Walmart’s India e-commerce unit also drove a 10 basis points increase in gross profit rate of its international business, the company reported.
In the US, Walmart saw a 74% growth in its e-commerce business, which along with increased in-store sales, drove up the company’s revenue by 8.6% to $134.6 billion and net income by 4% to $4 billion in Q1.
Despite this strong growth, Walmart said that the Covid-19 pandemic had created a situation of “unprecedented variability”.
Source: The Economic Times