Covid-19 restrictions crippled business in India: Walmart

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The first outbreak of covid-19 in India was reported in Kerala on 30th January 2020 and gradually the pandemic outburst in all states in the country. The prime minister declared ‘Janata Curfew’ on March 22 and the first nationwide containment measure introduced on March 25 as nationwide lockdown. Since then India has implemented lockdowns, curfews, international and domestic travel bans to curb the spreading of the disease.

Covid-19 restrictions have serious repercussions on the business and life of the people. India has frequently imposed lockdowns and permitted only the movement of essential commodities. Walmart stated that the covid-19 containment measures harmed its operations in the country. However, the growth rate of Flipkart and PhonePe remains constant. Brett Biggs (executive vice-president and chief financial officer, Walmart) on the conference call of Q1FY22 earnings said that the pandemic has both positive and negative effects on the Walmart business. The company’s business continues to have ill consequences in some of the international markets such as India and Canada due to the coronavirus and containment measures for it.

India being adversely hit by the pandemic has announced lockdowns in most of the states including big cities such as New Delhi, Mumbai, etc., and only online sales permitted for essential items such as groceries, food, and medical products. As a result, major e-commerce companies such as Amazon and Flipkart gained major market share for non-essential items such as mobile phones, electronic devices, and consumer durables in the regional online market.  Since the financial year of Walmart is from February to January, the company has not fully recorded the diminishing business in its book of records.

The CEO of Walmart Doug Mcmillon said that there is a 150% increase in the total payment value run rate for the year at Phone Pe and Flipkart shows the best performance. The company’s aim to acquire Cleartrip shows that they want to offer a digital market experience to the customers. The CEO hopes that the partnership with Adani Group will help the company to enter into new areas such as data storage and logistics.

In Q1FY22, Walmart recorded a decrease in its net sales i.e., $27.3 billion and it is due to recent divestiture. The total revenue of the firm slightly increased to $138.3 billion compared to last year.

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