The gross merchandise value (GMV) on etailer Flipkart, which is a subsidiary of Bentonville, Arkansas headquartered retail giant Walmart, has surpassed pre-Covid levels.
The rise in GMV was despite the e-commerce giant facing hurdles in operations during the Covid-19 induced national lockdown, Walmart executive vice president and CFO Brett Biggs said during the announcement of the company’s financial performance for the second quarter of fiscal 2021.
“Flipkart operations were closed for around half the quarter, but since reopening in mid-May, GMV is exceeding pre-Covid levels,” Biggs said.
GMV is a metric used by ecommerce companies to capture the total value of merchandise sold over a specific period of time.
Walmart reported net international sales of $27.2 billion for second quarter (May-July) of FY 2021, a decrease of 6.8% over the corresponding quarter in the previous financial year. This was due to government mandated closure of business of Flipkart in India and similar actions in Africa and Central Americas.
The retail giant clocked a revenue of $137.7 billion for the quarter ending July 31, a 5.6% increase over the corresponding quarter in FY 2020.
Earlier this month, Flipkart conducted its Big Savings Day sale to compete with Amazon’s Prime Day sale. The numbers for the sale will reflect in the next quarter’s financials for Walmart.
In July, a fund infusion of $1.2 billion from existing shareholders including Walmart valued Flipkart’s business at $24.9 billion post-money.
In response to a query on the valuation of Flipkart, which was lower than market expectations, Walmart CEO Doug McMillon said that the company wasn’t too concerned about the valuation which was lower than market expectations. Walmart had first acquired 77% stake in Flipkart at a valuation of $20.8 billion in 2018.
“This is a time when there's so much of an opportunity that the size of the prize in India is significant. We want to make sure that we're on our front foot being aggressive. So, we're not really getting hung-up on the valuation in the short-term,” McMillon said during the earnings call.
“Over time, I think everybody will understand just how valuable that business in India is, whether it's the Flipkart portion or the PhonePe portion," he added.
In late July Flipkart also acquired Walmart India’s cash and carry business to roll it into Flipkart Wholesale, the business-to-business marketplace operated by the ecommerce entity.
For the quarter ending April 30, 2020, the retail giant reported that the closure of Flipkart’s business from March 25 due to the lockdown had eroded its international business.