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COVID-led operational curbs in India impacted business

Walmart on Tuesday said the Covid-led operational restrictions in India had impacted business. However, the overall growth momentum of Flipkart and PhonePe remains intact.

“The Covid pandemic continues to create both tailwinds and headwinds for our business. Certain international markets continue to be negatively affected by the resurgence in Covid cases and related government restrictions particularly in India and Canada,” executive vice-president and chief financial officer Brett Biggs said during the company’s Q1FY22 earnings call.

Most Indian states have imposed lockdowns and curfews to tame a deadly spike in cases. In some markets, including the major ones like Maharashtra and New Delhi, e-commerce companies are allowed to deliver only essentials. Essentials would typically include food, grocery items and medical supplies.

As a matter of fact, non-essentials, particularly smartphones, electronic items and consumer durables drive the major chunk of business for e-commerce firms like Flipkart and Amazon, who jointly command the biggest share of the local e-commerce market.

Walmart’s financial calendar runs from February to January, thereby partially capturing the impact of India’s curbs in its books.

Flipkart and PhonePe, however, continue to “experience strong growth,” during the quarter, the US-based retailer said. “…the annualised total payment value run rate at PhonePe grew by more than 150% versus last year. At Flipkart, monthly active customers and users are key metrics and are performing well,” president CEO Doug McMillon said.

Biggs added that Flikpart is “driving strong and sustainable e-commerce GMV growth”. McMillon said the company’s recent announcement of its intent to acquire Cleartrip underscored the firm’s commitment to transform the customer experience through digital commerce.

“Our growing base of customers means we need to continue to add new capabilities, including areas such as logistics and data storage. The recently announced partnership with Adani Group will help us do just that,” the CEO said.

Walmart’s international net sales declined 8.3% year on year to $27.3 billion in Q1FY22. Segment net sales were negatively affected due to recent divestitures, the firm said in a statement. The company’s total revenues stood at $138.3 billion during the quarter, a marginal increase from $134.6 billion it posted in the year-ago period. Financial Express

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