“Serving nearly 270 million customers a week in 28 countries and generating $500.3 billion in revenue...” those were the opening remarks of Doug McMillon, President and CEO, Walmart Inc at the annual shareholders meeting in the US held recently, where Flipkart, the company’s newest acquisition in India, was one of the hot topics of discussion.

“Focus is a priority. That is why you see us divesting non-core assets like shopping malls and banks and investing in new growth areas and technologies,” McMillon said. He added that the company has “announced bold steps like our investment in India’s Flipkart and the proposed combination with Sainsbury’s in the UK... Meaningful change is rarely easy but it’s essential to set us up for success in the future.”

Walmart acquired 77 per cent stake in Flipkart for $16 billion, including $2 billion of new equity funding. The deal values Flipkart at $20.8 billion. The deal is pending regulatory approval and is expected to be completed later this year.

Terming India a unique opportunity, the CEO clarified that the “timing might have been earlier than we wanted, but we decided to take it”.

Brett Biggs, Executive Vice-President and Chief Financial Officer, Walmart Inc, also spoke about the company’s decision “to grow in India by acquiring Flipkart. India is a market with 1.3 billion people and great growth potential. Flipkart is an amazing, disruptive company with great leadership changing how people shop in India. We are excited about this new opportunity.”

Smart shopping

Some of the new approaches were evident at the shareholder meeting, with Walmart debuting new robots at the meeting and saying the robots would make their stores more efficient. This year the company is courting a more upscale consumer.

Judith McKenna, President and CEO of Walmart International, also spoke about Flipkart and its “35 per cent hold of the Indian market” at the shareholders meeting. Claiming that Walmart is eager to allow Flipkart to be very successful, she said India is a compelling growth market with long-term potential.

Chairman of the Board Greg Penner, who also spoke on the occasion, discussed the recent acquisitions of Jet.com (Walmart’s 2016 acquisition of Jet.com’s e-commerce division for $3 billion) as well as India’s e-commerce giant Flipkart, saying the acquisitions are helping grow the company’s e-commerce exponentially.

Walmart expects e-commerce to grow at four times the overall retail sector in India.

Highlighting the synergy between the two, Abneesh Roy, Senior Vice President-Institutional Equities, Edelweiss Securities, said, “its India business has been sub-scale, with annual revenue of $0.5 billion versus $500 billion global revenue. Flipkart will offer scale to Walmart’s India operations. To scale up the business and achieve the next leg of growth, Walmart and Flipkart plan to support 5-6 million kirana (small mom-and-pop) stores through modernisation of retail practices.”

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