‘Walmart plans to triple export from India to $10bn/yr by 2027’
The president and chief executive officer (CEO) of Walmart, Doug McMillon, on Thursday said that the company’s plan to triple its export of goods from India to $10 billion annually by 2027 was in keeping with its aim to source more Made in India products.
India is already one of the top sourcing markets for Walmart, one of the world’s top retailers, with annual exports worth $3 billion. “India is an important part of the Walmart story... We’re still in the early stages of developing our business in India but we’re confident we can grow together. Our experience of working with Flipkart so far has given us confidence in Indian companies. It makes us feel upbeat about making investments like the one we announced today. The more the Indian economy opens, the more opportunities it will have to reap these benefits,” McMillon said at the 18th Hindustan Times Leadership Summit. “India is an important part of the Walmart story. And all the work we have done in India is important to us because we believe in your country’s people and potential for a long time now.”
Walmart Inc.competes with Amazon and Reliance-owned JioMart in India’s $850 billion retail market and McMillon said that the US retailer will be “patient” before opening its signature front-end stores in the country as it looks to significantly grow its existing businesses that include homegrown e-tailer Flipkart and digital payments major PhonePe. Flipkart now also operates Walmart’s cash-and-carry business that services local kiranas.
While speaking about Flipkart’s muchawaited IPO, McMillon added that the initial plan of taking India’s e-commerce leader to public markets still holds. “When we invested [in Flipkart] we did mention that our plan is to IPO and that hasn’t changed. But I don’t have any other specifics to share today... The idea is that we can build a business, and let multiple partners benefit from that, whether it’s the customers that use these platforms or it’s the people that invest. Today, we have other investors in Flipkart and PhonePe and we could further diversify that in a number of different ways including an IPO. There’s lots of room to invest and we’re excited about being a majority investor, but there’s still room for other people.”
India’s restrictive foreign investment policies, however, have kept large foreign supermarket away from participating in physical retail trade as India tries to shield local retailers from foreign competition.
On being asked whether McMillon finds India’s FDI rules are crimping the retailer’s growth prospects in India, he said that competition will bode well for consumers and markets — but for that India must open up for investments. “Well rules change everywhere. You know we operate in all these countries so it’s not unfamiliar to us that government policies would change. Our big bet is that India is going to grow and India wants competition because they want market dynamics, they want consumers to be able to save money, they want higher quality merchandise, they want taxes paid, if you want all those things, then you should be for investment and for competition and some money will come from within India, and some money should come from outside India for India to fulfil its potential. So that’s it that’s our long-term bet,” he said.
“Even before Flipkart and PhonePe came along, we experienced changing government regulations. But as things evolve over time, great leaders will make good policy decisions, and things in general will open up ... and we can participate in that. What we try to do with Indian government leaders, and with all the stakeholders in India as well as the other countries we operate in.. is just keep demonstrating who we are,” he said.