Tripling India sourcing to $10 bn a year, growing team: Walmart Int’l CEO

Walmart, the world’s largest retailer, is tripling its sourcing from India to about $10 billion a year, said Judith McKenna, president, and chief executive officer of Walmart International, the segment which includes the company’s operations outside the US.

“To achieve this, we are growing our sourcing team in India,” said McKenna, during a fireside chat with YourStory Founder Shradha Sharma at Converge@Walmart, the flagship event of Walmart Global Tech India. “Walmart has a 20-year history of sourcing from India and already exports more than $3 billion worth of Made-in-India goods each year to 14 markets worldwide.”

McKenna said the company has expertise in processes such as international standards and demand forecasting that businesses need to get ready to export. It walks with entrepreneurs every step of the way to make sure they are successful. “MSMEs (micro, small and medium enterprises) are a big focus for us.”

She said the Coronavirus (Covid-19) pandemic highlighted the importance of Walmart’s flexible, agile and diversified global supply chain. “India has long played a big role and will continue to do so,” said McKenna.

The Bentonville-based company (in Arkansas) is locked in battle with US rival Jeff Bezos-founded Amazon, Mukesh Ambani-owned Reliance’s JioMart, and Tata-owned BigBasket for dominance in India’s online retail market through Flipkart, which it bought for $16 billion in 2018. Digital payments giant PhonePe also came to Walmart as part of the acquisition. India’s retail market is estimated to reach over $1 trillion by 2025.

McKenna said the Covid-19 pandemic also accelerated India’s digitalization journey, with online shopping and contactless payments becoming more popular. “Kiranas doing last-mile delivery for Flipkart saw delivery income increase about 30 per cent in 2020,” she said.

Innovations from India are also helping Walmart improve retail around the world. India is a source of talent and technology for Walmart globally. “Our people in India have a relentless passion to innovate and problem-solve, putting the customer at the center of everything,” said McKenna.

For instance, an India-developed sales forecasting solution is helping Walmart stores in Mexico and China improve the availability of fresh foods and reduce waste. A Flipkart-developed advertising platform is helping our Chilean business tailor ads and gain insights. Also, PhonePe, which eases payments friction for more than 300 million users and is digitizing 25 million kiranas, is helping Walmart think differently about financial access in Mexico, said McKenna.

Flipkart is also betting big on social commerce, which is the use of social network communities to drive e-commerce sales. Social commerce is expected to be about a $70 billion market opportunity in the next few years. Flipkart recently launched Shopsy, an app that enables Indians to start their online businesses without any investment. With Shopsy, Flipkart aims to enable over 100 million online entrepreneurs in the next few years as they reap the benefits of digital commerce.

“We are very excited about Flipkart’s new Shopsy. It is a world-first foray into social commerce for us,” said McKenna. “It provides a very low entry barrier for people to start a business and is also a fun and easy way to introduce people to online shopping.”

MSMEs also require training and support to help them get export-ready. McKenna said entrepreneurs with big dreams can get export-ready by learning business skills, embracing world-class processes and technologies, and building a network of business contacts. Here the company’s Vriddhi program is playing a key role.

Walmart Vriddhi trains people to help them scale and grow their business in the domestic market and for export with Walmart or other companies. Entrepreneurs can learn how to lead teams, do responsible sourcing, put a business plan together, get financing, and manage the health and business impacts of the pandemic.

“Technology is not just about e-commerce, but also helps you be more efficient and competitive,” said McKenna. “When MSMEs on the Flipkart platform were hit with labor shortages and supply chain challenges because of the pandemic, Flipkart helped them use technology to anticipate consumer demand and find solutions.”