Walmart says Flipkart's 'limited operations' during COVID-19 outbreak negatively affected Q1 growth

New Delhi: Retail major Walmart on Tuesday said “limited operations” by its Indian e-commerce firm Flipkart amid coronavirus outbreak has “negatively affected growth” of its international business in the March 2020 quarter.

Walmart group’s overall net sales stood at $133.67 billion during the reported period, logging a growth of 8.7 percent.

Walmart International, which is present in nine markets including China, Japan, Mexico, the UK apart from India, saw sales growing by 3.4 percent to $29.76 billion in the January-March period, with e-commerce accounting for 9 percent sales.

“E-commerce contributed 9 percent of total segment net sales, led by growth in China, Canada, UK and Mexico. Limited operations of the company’s Flipkart business in India for a portion of the quarter negatively affected growth,” said Walmart in a post earnings statement.

India is presently under an unprecedented lockdown since 25 March to prevent the spread of the COVID-19 pandemic. The government imposed the lockdown, restricting commercial activities and vehicular movements, among other curbs.

While, in the US market Walmart recorded a 74 percent growth in its e-commerce business.

“Store pickup and delivery, ship to home, ship from store and marketplace channels were strong throughout the quarter,” it said.

During the quarter, Walmart International’s gross profit increased 10 basis points on a reported basis, primarily due to the company’s Flipkart business.

However, this was “partially offset by an outsized change in mix towards lower margin categories and formats in response to COVID-19”, said Walmart.

During the quarter, Flipkart had also announced partnership with ride-hailing platform Uber to deliver everyday essentials to customers.