Flipkart records double-digit sales growth in March quarter

Walmart-owned e-commerce firm Flipkart witnessed strong top-line growth during the January-March quarter, improving its contribution to the parent company's net profit.

Flipkart clocked double-digit sales growth, Walmart chief executive officer Doug McMillon says in the retail giant's March quarter earnings call.

"For India, a group of us were there last week and we left even more excited about our opportunities. Flipkart and PhonePe are doing well. Our Walmart tech team there is strong, and we have a big opportunity to increase our exports from India across quite a few merchandise categories," McMillon says.

Sales from Walmart's international business grew 12.9% in constant currency, and profit grew even faster at 41%, says the CEO of the Bentonville, Arkansas-headquartered retailer.

In India, Flipkart's e-commerce platform continues to scale, growing first-time e-commerce customers and expanding its reach in Tier 2 and Tier 3 cities, says Walmart executive vice-president and chief financial officer John David Rainey.

Flipkart's eKart business now includes more than 35,000 Kirana partners, as well as provides fulfilment services for Flipkart sellers and other third parties, Rainey says.

"Flipkart had strong top-line results and improved its contribution profit. The team continues to expand their products and services. As an example, Flipkart Travel added to its portfolio of offerings by launching bus reservation services during the quarter through its Cleartrip platform and already is capable of offering 1 million bus connections to customers," he says.

Walmart's international advertising business continued to show strength, led by Flipkart ads which were up over 50%, says Rainey.

Judith McKenna, president and chief executive officer, Walmart International, says "Both Flipkart and PhonePe continue to impress us and meet our expectations."

McKenna says Walmart's most mature marketplace is in India, which has hundreds of millions of products and continues to find new ways to serve customers.

The company is seeing 'really good traction' in recently launched Flipkart fulfilment services, she says.

Commenting on Walmart's digital payments unit PhonePe, McKenna says it's really impressive to see their results. "Leveraging over the 1 trillion TPV mark, 36 million merchants online, and enabling those merchants to be able to grow their businesses as well was really impressive to see. And what we're seeing in India is a buildout of an ecosystem in its own right," she adds.

"Between our tech capabilities, between our sourcing capabilities, Flipkart, and PhonePe, it's becoming a mutually reinforcing flywheel of strength for that market, and we're excited about what they're going to do in the future," McKenna adds.

PhonePe has so far raised a total of $750 million of its $1 billion target as it looks to aggressively scale new businesses like lending, stockbroking, and insurance among others.

The digital wallet recently launched a new shopping app called Pincode which is built on top of the ONDC network. The app focuses on hyperlocal commerce in categories including food, grocery, electronics, pharmacy, fashion, and home décor.

With nearly 450 million registered users on the PhonePe app, the company has strategically opted to launch a new app instead of integrating it into the existing one, Fortune India reported last month.

The company is looking to expand Pincode to the top 10 cities in the first year of its operation. The first effort would be to digitise the sellers' catalog, Sameer Nigam, CEO and founder of PhonePe, said.

PhonePe had announced its separation from e-commerce major Flipkart in December 2022. Walmart, however, remains the majority shareholder in both business entities.