Walmart India’s FY22 Loss Widens 1.5X To INR 300 Cr, Operating Revenue Up 7%

Retail giant Walmart India’s loss widened nearly 50% to INR 299.01 Cr in the financial year 2021-22 (FY22) from INR 200.8 Cr in FY21 on higher inventory costs. 

Its revenue from operations rose 7% to INR 5,349.98 Cr in FY22 from INR 5,004.88 Cr in FY21. On similar lines, total income grew to INR 5,361.72 Cr from INR 5,038.75 Cr in the previous fiscal.

Meanwhile, total expenses jumped 13% year-on-year (YoY) to INR 5,660.74 Cr in FY22. Purchase of stock-in trade accounted for the biggest chunk of expenses at around 86% or INR 4,881.75 Cr during the financial year ended March 2022. 

Interestingly, employee expenses tanked 32% to INR 227.69 Cr in FY22 from INR 333.69 Cr in FY21. 

Walmart India operates brick-and-mortar stores, called Flipkart Wholesale (formerly known as Best Price), which sell everything from electronics items to crockery. Operating on a B2B cash-and-carry model, the stores largely target kirana stores, hotels, restaurants, institutions, and MSMEs. 

The stores were started as the byproduct of a joint venture between Bharti Enterprises and US-based Walmart. Initially named Bharti-Walmart, the stores were renamed as Best Price Modern Wholesale in 2009. Later, in a bid to go solo into the Indian markets, Walmart acquired Bharti’s stake in 2013.

Subsequently, in a bid to streamline its operations, Walmart-backed Flipkart Group acquired 100% interest in Walmart India in July 2020. 

Walmart India currently operates 29 Best Price Flipkart Wholesale stores and 2 fulfilment centres in 9 states across the country.

Walmart is among the many global retail giants who have failed to turn a profit in the price-conservative Indian market. Home decor store Ikea reported a revenue of INR 1,076 Cr and a net loss of INR 902 Cr in FY22. 

Not just this, Flipkart Group’s other subsidiaries are also operating in the red. Flipkart’s marketplace arm, Flipkart Internet, saw its standalone net loss surge more than 51% to INR 4,361 Cr in FY22 from INR 2,881.3 Cr loss in FY21. 

Walmart India largely competes with players such as Metro Cash & Carry in India as well as online B2B giants such as Reliance JioMart and Udaan.

While general trade practitioners largely prefer offline wholesale stores, the online B2B space is also fast gaining acceptance among these small kirana stores. While Udaan and JioMart de facto rule the space, Walmart India also has made inroads into the highly competitive online B2B space.

According to a report, India’s B2B ecommerce market is estimated to reach $90-$100 Bn in gross merchandise value (GMV) by 2030, pointing to the growing popularity of these avenues.