Indian retail market is one of the most exciting and unique around the world and so Walmart has to "think local and execute locally", while adhering to the country's rules, according to Walmart Inc. president and chief executive officer (CEO) Doug McMillon.
Speaking at the Converge@Walmart event on Wednesday, McMillion confirmed that the Flipkart Group, at present, has a reach of 300,000 marketplace sellers, with payments arm PhonePe having more than 300 million users.
“The Indian market is very unique and exciting. It's one of the most exciting markets around the world--one of the the top three along with the US and China. We're really excited to be a part of that and proud of the history that we've had in the country as we work to build a business there. We think the future is very bright and are going to see a market (in India) north of a trillion US dollars by 2025,” said McMillon.
India’s foreign direct investment (FDI) rules disallow global players like Walmart Inc. to directly invest in multi-brand retail and open brick-and-mortar stores. Walmart, which ended its wholesale joint venture with Bharti Enterprises in 2013, acquired Flipkart for $16 billion in 2018, setting sights on India’s small but rapidly growing e-commerce market.
“India is such a diverse market and not one country in some ways. So, we have to think local and execute locally in India. It has its own rules and so we have to comply with those rules. Today, we're not allowed to make a foreign direct investment in a multi-brand retail store, the physical brick-and-mortar store. So, we operate in a different way[...] I do believe we will see generations skipping in India, which will be exciting,” commented McMillon.
Last year, Walmart also announced big plans to triple its annual exports from India to $10 billion by 2027. India continues to be the top sourcing market for the Bentonville-headquartered retail conglomerate, with annual exports stacking up to $3 billion.
“My key takeaway was this team (Flipkart and PhonePe) can problem-solve and overcome things. And no doubt in every market we operate in, especially India, is going to have challenges. It's a very dynamic environment - rules are changing, customers change, competition's changing. So, where you sit at this moment is only a partial picture of the story of that business. The real question is, can you show up every day and have an engaged set of leaders that want to solve tomorrow's problems,” added McMillon about Flipkart and PhonePe.
Earlier in July this year, the Flipkart Group raised $3.6 billion, led by parent Walmart Inc. and returning investor SoftBank Group Corp., that valued the e-commerce company at $38 billion.