By Pranav Balakrishnan & Writankar Mukherjee
“Walmart and Ikea are currently in a market acquisition mode in India to establish a dominant position and may sacrifice profit in the short term,” said Devangshu Dutta, chief executive of consulting firm Third Eyesight. “But in the long term, these companies will definitely chase profit in India. Also, the market environment has been tough last fiscal due to increased competition despite a bounceback post-Covid,” he said.
Walmart is yet to publish the FY22 results of Flipkart India Private Ltd, which is a business-to-business entity which supplies goods to online sellers and also Flipkart’s online B2B business. The entity posted a revenue of Rs 7,840 crore in FY21.
Furniture and home décor store Ikea India reported revenue from operations at Rs 1,076 crore in 2021-22, while the net loss was Rs 902 crore.
In the filings, the company said it continued to work on its plans towards positioning, growth and profitability of the omni-channel business in India. It said expansion plans and operations were impacted due to Covid-19 in FY22, but the management is optimistic about future prospects.
Of the Walmart arms in India, Flipkart Internet, posted a 33% rise in operating revenue of Rs 10,476 crore in the year ended March 31, 2022, while its loss widened to Rs 4,361 crore from Rs 2881 crore in FY21. The filings showed the company spent Rs 5,045 crore in delivering orders, which was 46% higher compared with the year before, while advertisement and promotional expenses almost doubled to Rs 1,945 crore from Rs 1,073 crore.
The company’s revenue comes from multiple sources, including platform fees collected from sellers, and services such as shipping and carrying advertisements. Revenue from marketplace services remained largely flat at Rs 2,823 crore while that from advertisements increased 50% to Rs 2,083 crore. The Indian company is the top contributor to parent Walmart’s ad revenue globally. Revenue from logistics services grew 57% to Rs 3,848 crore.
Meanwhile, Walmart India – which owns and operates 28 cash and carry wholesale stores – posted 6% jump in revenue at Rs 5362 crore in FY22, while net loss went up by 49% at Rs 299 crore as compared to the year ago.
Myntra Design, the Walmart entity which owns the fashion marketplace Myntra, reported a 45% jump in revenue from operations to Rs 3,501 crore while losses widened 40% to Rs 597 crore in FY22. Revenues of Myntra Design come from commission and service charge collected from brands and sellers on the platform.
Revenue from marketplace service increased 18% to Rs 1,610 crore, while income from logistics services almost doubled to Rs 1,498 crore and revenue from advertisement jumped 76% to Rs 344 crore.
ET reported on September 13 that Amazon Seller Services, which runs the Amazon India marketplace, reported a 32% jump in overall revenue to Rs 21,633 crore on a standalone basis in FY22.The local unit of Seattle-based Amazon had also cut losses by almost 23% to Rs 3,649 crore in FY22.
Source : economictimes