Walmart, which owns 77% stake in Flipkart, will look at leveraging the homegrown e-commerce platform’s payments arm PhonePe in markets like the US and Mexico, said a top executive.
Walmart finance chief Richard Mayfield also said that Flipkart’s marketplace business was compliant with Press Note 2, “after four or five weeks of running around and making changes in some operational processes and some technology”, and that the company was used to that environment because of its decade-long presence in India through its cash-and-carry business.
Press Note 2, which came into effect from February, prohibits foreign direct investment in inventory-based e-commerce marketplaces and their subsidiaries which sell on the platform.
“I think one thing I'd probably say is that, of all the potential outcomes in the elections, a Modi government with a bigger majority is probably the best outcome for business that time will tell,” said Mayfield.
Mayfield also said that the digital business being built by Flipkart subsidiary PhonePe was showing strong growth and bringing down costs over a period of time with automation. He also said that the retail major was looking at deploying this technology in other geographies, especially Mexico, where Walmart has started its own wallet, Cashy. The company has also introduced PhonePe as a payment option across its cash-and-carry stores.
PhonePe’s wealth management services such as mutual fund investments rolled out in March.
Mayfield said that PhonePe had 60,000 merchants in July 2018. “There is now four million merchants (on PhonePe) already so you can see the pace of development and that obviously those new use cases are driving frequency outputs,” he said, adding that the regulatory environment pertaining to digital transactions and linking of bank accounts with biometric IDs will push PhonePe’s business.
“There is about 400 million smartphone users in India and that’s projected to grow to 860 million over the next five years. So there's a big growth opportunity there. We’re very excited about the teams in both Flipkart and PhonePe,” said Mayfield. He added that with Flipkart, Myntra and Jabong’s businesses, they had market lead in apparel, mobile phones, and large electrical appliances in the e-commerce business.