McKenna said there has been clear proof of value at Flipkart. They have met our expectations and delivered what they need to deliver to McKenna. McKenna added that the e-commerce giant will pursue an IPO when the time is right.
Speaking at the 2022 Baird Global Consumer, Technology & Services Conference in New York, Walmart International CEO and President Judith McKenna said the US retailer is confident Flip kart will achieve profitability.
Flipkart On Track To Profitability
McKenna said there has been clear proof of value. She noted that Walmart first invested in Flipkart at a valuation of $20 billion. She also noted that when Flip kart raised $3.6 billion in 2021 from Walmart & SoftBank, it did so at a valuation of around $38 billion.
Reas Also : PhysicsWallah Becomes India’s 101st Unicorn, Raises $100 Mn
And we have been very clear that we have been happy every step of the way during the four years that we have made the investment. Therefore, they have met our expectations and have delivered what they had to deliver, said the CEO of Walmart International.
India remains one of four key international markets for Walmart, along with Canada, China & Mexico. The US-based retailer has a presence in 23 countries outside of its home territory.
Walmart claims that its international business generates $100 billion in revenue or about 18% of its total revenue.
Profitability soon for Flipkart, IPO- ‘When Time Is Right’
According to McKenna, Flip kart will soon reach profitability. She said the e-commerce giant will pursue an IPO when the time is right.
And when the time is right will depend on a number of factors, not just the market, but also business performance, McKenna said.
They met our deadlines We wouldn’t have invested if we didn’t believe they could turn profitable in the long run, and we’re still on track to do so, she added.
Incidentally, Walmart had stated the same thing in its press release when it acquired a 77% stake in Flipkart in 2018. Back then, Walmart CEO Doug McMillan had said that Flipkart will go public within four years. after completion of the acquisition.
According to media reports, Flip kart has raised its IPO valuation target to around $60-70 billion, with plans to list on one of the US stock exchanges by 2023.
Advertising The route to profitability
McKenna also said India remains Walmart biggest ad revenue market. The new utility funds are really interesting. They are our biggest market by a long way for ad revenue, she said.
It is prudent to note that Flipkart has developed advertising as a strong source of income for itself. The same is true for all eCommerce businesses.
E-commerce companies offer sellers the option to advertise their products on their platforms, charging them money for it.
These companies also provide tools, software support, and dashboards to optimize and analyze ad spend and conversion rates to sellers for a good experience.
Ad flow is particularly important on Flipkart because of its vendors, McKenna said.
Flipkart brand house
Flipkart has been making acquisitions for a while now and has expanded its core business to include Myntra and the Shopsy social commerce platform.
In April, Flipkart Singapore entity invested $116 million in Myntra, after the same entity had invested $553.2 in the marketplace business.
However, the e-commerce giant has sought to diversify its product portfolio beyond e-commerce. The process began with the acquisition of fintech unicorn PhonePe.
Additionally, he has ventured into health technology with Flipkart Health. The company recently completed a $143Mn investment in it, after launching the Flipkart Health+ app. Including these two, Flipkart also has a majority stake in travel tech startup Cleartrip.
