BENGALURU:
Walmart
CEO
Doug McMillon
has said the changes in India’s
FDI
policy for the e-commerce sector have been “disappointing”, but they haven’t shaken Walmart’s “confidence and excitement” about
Flipkart, where it acquired a 77% stake for $16 billion in August last year.
“We feel good about the ability to transition with minimum disruption. There will be additional cost to comply with the new regulations, but we don’t currently feel there will be a significant impact on current guidance,” McMillon said. He was talking to analysts in a conference call after the December quarter earnings for the Bentonville-based retailer.
A note by Morgan Stanley recently said Walmart could see an incremental loss of $280 million from Flipkart by the end of the year on top of the projected $1.5 billion. Amazon, too, is said to be likely to see higher losses as an aftermath of these new rules, multiple industry reports added after the new FDI clarifications.
The new policy put a series of curbs on how both Amazon India and Flipkart operate — restricting discounts, disallowing ownership in sellers on the marketplace platform as well as exclusive product launches — forcing them to restructure operations and both of them took short-term hit on sales. Walmart CFO Brett Biggs also reiterated during the call the reasons that led Walmart to get into India. He said that these are still there — like middle-class user base and e-commerce growth. Moreover, Walmart indicated Flipkart is an ecosystem now and not just one platform with group companies like payments arm PhonePe besides fashion portals
Myntra and
Jabong
.
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