Flipkart Prioritizes Market Share Over Profits, Says Walmart International CEO

Walmart International is approaching Flipkart's expansion cautiously, giving market share and long-term potential precedence above immediate financial gain.

Kathryn McLay, president and CEO of Walmart International, stated during the 41st annual strategic decisions conference hosted by Bernstein that the company is dedicated to growing Flipkart in a sustainable manner instead of aiming for quick profits.

Walmart International is thrilled with their (Flipkart) expansion, McLay said. The business does not prioritise profitability to the point that it would compromise future expansion and market share. Therefore, the brand will reach profitability at the appropriate moment when you balance all of that.

McLay added further that 20% of the country's e-commerce business is currently made up of rapid commerce. Quick commerce is on a "50% growth trajectory" nationwide, she claimed, and Walmart intends to "play" in the market with vigour.

Focusing on 15 Minute Delivery

McLay discussed Flipkart's entry into the fast commerce space, stating that whereas the e-commerce site "used to deliver at best within a day" a year ago, it now makes a "15-minute promise". Flipkart now has 250 fulfilment hubs that deliver goods "within minutes", she continued. "It was a 1-2 day promise," McLay said.

Although the brand can occasionally deliver in as little as three minutes, the company is now required to deliver within fifteen minutes.

For her, those powers are, you know, crazy. However, the business is currently investing in a new, developing sector (rapid commerce) as it continues on its path to profitability.

Lessons Learned From China

In order for the Indian team to be able to fulfil goods in less than 15 minutes, McLay stated that the US-based retailer has been sharing lessons learnt from operations in China.

“The CEO of Flipkart asked me where I might find information on speed in Walmart Enterprise when we noticed an increase in swift commerce. I also directed him to China. He sent a crew over then, and they comprehended and gained knowledge from that," McLay continued.

Flipkart then refined its rapid commerce business model by iterating on how to create an "equation" around square footage, closeness of dark stores, number of orders, number of delivery partners, and speed, according to the CEO of Walmart International.

She stated, "And they (Flipkart) will continue to refine that model, and then they will pass those learnings back to China and other markets."

 Regarding the distinction between Walmart's e-commerce activities in China and India, the top Walmart official stated that, in contrast to its platform in China, Flipkart only functions as a 3PL online company and has digital advertising.

 She added that the fashion marketplace's unique selling proposition is customisation and hyper-personalisation, calling Myntra "one of the hidden gems" in the Flipkart business.