News Update

Walmart India’s FY22 Loss Widens 1.5X to 300 Cr, Up 7% in Operating Revenue

• ByStartupStory     |    November 2, 2022

Due to rising inventory expenses, retail behemoth Walmart India saw its loss nearly double, from INR 200.8 Cr in FY21 to INR 299.01 Cr in FY22. From INR 5,004.88 Cr in FY21 to INR 5,349.98 Cr in FY22, its revenue from operations increased by 7%. Similar to this, overall income increased from INR 5,038.75 Cr in the previous fiscal to INR 5,361.72 Cr this fiscal.

In the meantime, overall expenses in FY22 increased 13% year over year (YoY) to INR 5,660.74 Cr. During the fiscal year that ended in March 2022, the purchase of stock-in-trade accounted for the largest portion of expenses, or almost 86%, or INR 4,881.75 Cr. It’s interesting to see that personnel costs dropped 32% to INR 227.69 Cr in FY22 from INR 333.69 Cr in FY21.

Flipkart Wholesale, originally known as Best Price, is a chain of physical stores run by Walmart India that sell anything from crockery to electronics. The stores, which use a B2B cash-and-carry business model, primarily target MSMEs, hotels, restaurants, and kirana stores.

The stores were launched as a byproduct of a partnership between US-based Walmart and Bharti Enterprises. In 2009, the store’s former name of Bharti-Walmart was changed to Best Price Modern Wholesale. Later, in 2013, Walmart purchased Bharti’s stake in an effort to enter the Indian markets on its own.

Then, in July 2020, Walmart-backed Flipkart Group purchased a 100% interest in Walmart India in an effort to streamline operations. Currently, 29 Best Price Flipkart Wholesale stores run by Walmart India are located in 9 different states, along with 2 fulfilment centres.

Walmart is one of many major international retailers that have struggled to make money in the price-conscious Indian market. Ikea, a retailer of home furnishings, reported FY22 revenue of INR 1,076 Cr and a net loss of INR 902 Cr.

Not only this, but the other companies of the Flipkart Group are also losing money. The marketplace division of Flipkart, Flipkart Internet, reported a more than 51% increase in its standalone net loss to INR 4,361 Cr in FY22 from INR 2,881.3 Cr loss in FY21.Walmart India faces stiff competition from retailers like Metro Cash & Carry in India as well as industry leaders in online B2B shopping like Reliance JioMart and Udaan.

Although general trade professionals tend to favour offline wholesale stores, these small kirana stores are also quickly adopting the internet B2B market. Walmart India has entered the fiercely contested online B2B market, even though Udaan and JioMart now have the majority of the market share. A survey claims that India’s B2B ecommerce business will generate $90-$100 billion in gross merchandise value (GMV) by 2030, demonstrating the growing appeal of these channels.

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