Walmart’s Growth Slows in Q4 Due to Flipkart’s Sales Event Timing Shift:

Retail giant Walmart’s growth in the December quarter registered a decline due to the shift in the timing of Flipkart’s flagship sales event “The Big Billion Days” (TBBD) from Quarter 4 last year to a majority in Quarter 3 this year.

“For a sale event, the timing of Flipkart’s Big Billion Days has certainly worked against its Indian sales YoY comparisons for the period. In rest of the world, e-commerce sales grew by more than 20 percent across all geographies,” said Walmart chief financial officer John David Rainey, while presenting the company’s FYFY25 Q4 results on February 20.

This change in balance for Flipkart led to muted growth for Walmart’s overall international revenues. The Bentonville retail giant registered a year-on-year increase of only 0.7 percent for net sales in this segment during Q4 to 32.2 billion dollars.

“E-commerce growth in International markets was up 4 percent and advertising business also performed at 10 percent growth. Both were impacted by the timing of Flipkart’s BBD,” the company said in its fourth quarter earnings.

Apart from India, Walmart’s international market consists of China, Mexico, as well as Canada, which was driven by growth from International festive seasons. The company had entered India in 2018 by acquiring Flipkart and so had been looking to gain in a growing market.

For e- commerce companies like Flipkart and Amazon, the festival season from September to Novemeber is crucial in India. In that time, these companies make more than 50 percent of their GMV.

Flipkart is known for The Big Billion Days sale which is usually conducted in October and this year it was between October 8-15, However, in 2023 the company changed the dates and increased the Walmart’s overseas sales by October 6. Because of this, the company got a bump of 8 percent YoY net sales in the September quarter.

What this did was help the retail powerhouse get a better gross profit rate which increased the quarterly profit by 53 basis points YoY.

Since the acquisition made by Walmart in 2018, Flipkart has been the market leader of e-commerce in India. It has often been featured in global earnings calls and unlike most companies, it has performed strongly multiple times.

Yet, it is not solely Flipkart that is fueling the growth of Walmart in India. Its PhonePe division, which is a fintech company, has also set the wheels into motion for an IPO.

"PhonePe, our fintech business, is working toward an IPO in India. Our PhonePe team always wanted to be a public company and we are very excited for this journey,” said Doug McMillon, Walmart’s CEO, to the analysts.

PhonePe was bought by Walmart in August 2018 during Walmart’s purchase of Flipkart. The ecommerce giant had been functioning as a separate entity for Flipkart until it did a corporate restructuring and moved from Singapore to India in December 2022.