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Flipkart's limited India operations hit global growth: Walmart

Flipkart's limited operations during the nationwide lockdown "negatively affected" growth in its international ecommerce business, US retail giant Walmart told investors on Tuesday, counteracting higher sales from China, Canada, UK and Mexico.

Walmart's chief rival Amazon, too, said earlier this month that India was its most impacted geography due to the lockdowns brought on by the Covid-19 pandemic.

"Limited operations of the company's Flipkart business in India for a portion of the quarter negatively affected growth," Walmart said in its earnings presentation to investors for the first quarter ended April 30.

Flipkart's sales plunged during end-March and in April as the government restricted ecommerce firms from shipping anything apart from food and groceries to consumers.

Analysts tracking the space told that groceries and food made up a very small percentage of Flipkart's business.

Doug McMillon, President and CEO of Walmart, said on a conference call with analysts that Flipkart's operations were impacted by restrictions on sale of non-essential goods. The Bentonville, Arkansas-based company said ecommerce accounted for 9% of its international sales, which grew by 3.4% to $29.76 billion in the first quarter.

Growth was driven by categories such as groceries and consumables but was partially offset by a dip in sales of apparel and general merchandise, the company added.

Walmart's India ecommerce unit, however, drove a 10-basis-point increase in gross profit rate of its international business, it said, without specifying how exactly it had done so.

In the US, Walmart's ecommerce business grew 74%, which along with increased in-store sales, pushed up the company's revenue by 8.6% to $134.6 billion and net income by 4% to $4 billion in the first quarter.

Despite the strong growth, Walmart said the pandemic had created a situation of "unprecedented variability".
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