Unleashing the Powerhouse: Flipkart and PhonePe on the Verge of Transforming into $100 Billion Titans, Reveals Walmart
By the earlier part of this year, Walmart had expressed its anticipation of India surpassing China as its largest international market by 2023.
15 June 2023
John Rainey, Walmart's CFO, expressed optimism about the potential for robust growth tailwinds to drive its marketplace and payments businesses in the country.
According to Rainey, it is not far-fetched to consider both businesses becoming $100 billion entities in the future.
This statement aligns with Walmart's earlier projection that India will surpass China as its largest international market by 2023.
During an investor conference, Walmart's Chief Financial Officer (CFO), John David Rainey, expressed his belief that the company's Indian subsidiaries, Flipkart and PhonePe, have the potential to evolve into $100 billion businesses in the near future. Rainey stated, "It is not crazy to think that both those businesses could be $100 billion businesses in the future." He further emphasized his optimism for India, noting that robust growth tailwinds could propel the marketplace and payments businesses in the country.
Almost a month after Walmart's financial reports for the quarter ending April 2023 were released, which garnered attention due to Flipkart's performance, the company has now issued a statement. Flipkart, the Indian ecommerce giant, achieved double-digit revenue growth during that period, contributing to Walmart's robust international sales figures.
This recent statement adds to a series of previous acknowledgments from Walmart executives, recognizing both businesses for their significant role in driving growth in the region and establishing themselves as industry leaders in their respective domains.
In previous statements, Rainey expressed his belief that India has the potential to surpass China and become Walmart's largest international market this year, highlighting the country as a highly promising opportunity for the future. He also acknowledged the significant addressable market potential for both Flipkart and PhonePe. These optimistic views are supported by Flipkart's impressive valuation of over $40 billion in 2022, solidifying its status as a prominent player within the startup ecosystem.
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PhonePe, despite facing the challenges of a demerger, holds the position as the leading digital payments player in the country, contributing to almost half of the UPI transaction value in May 2023.
Moreover, PhonePe has made a series of significant funding announcements throughout this year. In 2023 alone, it has secured a total of $830 million in funding from prominent investors such as General Atlantic, Ribbit Capital, Tiger Global, TVS Capital Fund, and its parent company Walmart. These investments have propelled PhonePe's valuation to surpass $12 billion.
As the two players face ongoing challenges, both PhonePe and Flipkart's marketplace arm continue to experience significant losses. PhonePe witnessed a surge of 16.4% in net losses, reaching INR 2,013.7 Cr in FY22 compared to the previous year. On the other hand, Flipkart's marketplace arm saw its losses increase by 1.5 times, amounting to INR 4,361 Cr in FY22.