Global retail giants Walmart and Ikea continued to bleed in India as their losses widened in 2021-22, despite a surge in sales
Three Walmart entities in the country—Flipkart Internet, which operates the namesake e-commerce marketplace; Myntra; and Walmart India, which operates Flipkart Wholesale stores (formerly known as Best Price) that sell goods to mom-and-pop stores—all increased losses by 40–50%, owing primarily to increased spending on delivering orders, advertising, and promotions, while revenues increased by up to 45%.
Ikea India’s net loss increased by 12% in FY22, while sales increased by 77%, according to filings with the Registrar of Companies and data from business intelligence platform Tofler.
Walmart has yet to release the FY22 results of Flipkart India Private Ltd, a B2B organisation that distributes items to online vendors as well as Flipkart’s online B2B operations. In FY21, the company earned Rs 7,840 crore in sales.
Ikea India recorded revenue from operations of Rs 1,076 crore in fiscal year 2021-22, with a net loss of Rs 902 crore.
According to the filings, the company is still working on its strategies for the positioning, growth, and profitability of its omni-channel business in India. It stated that COVID-19 hampered expansion plans and operations in FY22, but management is hopeful about future possibilities.
Myntra Design, the Walmart subsidiary that runs the fashion marketplace Myntra, reported a 45% increase in income from operations to Rs 3,501 crore in FY22, while losses increased 40% to Rs 597 crore. Myntra Design generates revenue from commission and service charges collected from brands and sellers on the site.
Despite being one of India’s leading e-commerce platforms, with a sale of Rs 10,659 crore in FY22, Flipkart recorded a Rs 4,362 crore loss for the fiscal year. It spent more than Rs 5,000 crore on fulfilling orders, about Rs 2,000 crore on marketing, and a comparable increase in promotional spending.
Despite regulatory challenges, Flipkart’s primary competitor, Amazon India, managed to lower its losses by 23% while increasing revenue by 32%.
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