- Walmart invests $1.4 billion to secure Flipkart shares, and Tiger Global gains $3.5 billion from a $1.2 billion investment.
- Flipkart reports widened losses at Rs 7,800 crore ($1.05 billion) but shows resilient revenue growth at Rs 51,176 crore ($6.9 billion).
- Walmart, Flipkart, and the Telangana government collaborate to boost MSMEs through digital initiatives.
July's ending might not have its ship sailing for Flipkart Company. It was not until the Wall Street Journal article that was published on 31st of July 2023, that mentioned about these collaborations.
Walmart has spent an astounding $1.4 billion to buy the remaining shares of Flipkart held by Tiger Global, in a move that highlights its growing engagement in the Indian e-commerce market.
This strategic move strengthens the retail giant's position in the budding company and increases its presence in the vibrant Indian market. Tiger Global exits this agreement with a stunning financial achievement after previously selling off a sizeable amount of its Flipkart assets.
The investment company, which had initially invested $1.2 billion, is already reaping spectacular profits of $3.5 billion, demonstrating the success of its early venture into Flipkart's trajectory. This now tempts us to know more about Flipkart's financial performance.
According to various sources and articles, that have been published - the following can be inferred:
Losses Widen: Its financial report for the fiscal year 2021–2022 was released, and it showed a significant increase in losses. The huge deficit came to a stunning total of more than Rs 7,800 crore, or almost $1.05 billion. This represents a significant downturn and compares sharply with the numbers from the prior fiscal year.
Resilient Revenue Surge: Flipkart amassed an incredible amount of income in the fiscal year 2021–2022, surpassing Rs 51,176 crore, or almost $6.9 billion. When compared to the previous fiscal period, this represents a stunning 18.74% increase in revenue, demonstrating Flipkart's ongoing ability to generate income.
Business-to-Business Struggles: The overall trend of losses was replicated by Flipkart's internal components, including its business-to-business segment, Flipkart India. The declared loss for Flipkart India increased from the previous fiscal year to Rs 3,413 crore.
Escalating Expenses: The full expense report for Flipkart for the fiscal year 2021–2022 was made public, showing astronomical spending of Rs 54,580 crore, or around $7.4 billion. The sharp decline in Flipkart's bottom line during this fiscal period is mostly attributable to this increased outflow.
Talk about Collaboration
Well, given the above stats, another interesting that happened at the end week of July was the collaboration with Telangana Government. Retail behemoths Walmart and Flipkart have teamed up with the Telangana government in a crucial alliance to support Micro, Small, and Medium-Sized Enterprises (MSMEs) through digital channels.
Empowering Digitization and Growth: The tripartite partnership's main goal is to spur local MSMEs' digitization and growth. This tactical choice will strengthen local businesses and catapult them into the digital age.
Support for Local Firms: Walmart and Flipkart will work together to lead the effort to digitize operations for local firms while also launching initiatives to improve capabilities. The main objective is to strengthen the MSMEs in the area's competitiveness and sustainability.
Formalizing the Pledge: A Memorandum of Understanding (MoU) signed with the Telangana government formalized the cooperation aim. This MoU highlights the common commitment to improve and change the environment for MSMEs.
Through digital fortification, the triumvirate's united front marks a paradigm leap that will revolutionize the local economic landscape.
Due to valuation issues, Flipkart's recent attempts to capture the market's interest fell short of success. But do not worry—the focus might just turn back to the humble Walmart.
It appears they will don their financial superhero cape once more in order to perhaps save the day and get the majority of the cash needed for the following round.
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Edited by Shruti Thapa