Walmart CEO unfazed by new e-commerce law; hopeful of future with Flipkart

Business Standard Walmart CEO unfazed by new ecommerce law; hopeful of future with Flipkart

The change in e-commerce policy came into effect from February 1

Companies News: Walmart, the world’s largest retailer, it was “disappointed with the recent change in law and lack of consultation” with regard to the new e-commerce regulations in India. But, it was confident of the long-term prospects of its India unit, Flipkart.

The Bentonville-headquartered company, which announced its 2018-19 (Walmart follows the February-January financial year) results on Tuesday, got a major leg up from Flipkart in its gross sales, despite divestment of its Brazilian unit. However, its operating income and profitability took a hit due to continued investment in its Indian subsidiary.

“In terms of the regulatory environment in India, we are disappointed with the recent change in law but the team is working to ensure we are in compliance with the new rules. We hope for a collaborative regulatory process in the future. This will result in a level playing field,” said Doug McMillon, president and chief executive officer, Walmart, during an analyst call.

The change in e-commerce policy came into effect from February 1. It bars ecommerce companies from selling products through firms in which they have a stake. Companies operating in this space also cannot earn more than 25 per cent of total revenue from a single platform.

McMillon, however, said the new regulations have not shaken Walmart’s “confidence and excitement” about Flipkart’s long-term prospects as the business has behaved in line with their expectations.

The company, he said, remained optimistic about India’s e-commerce opportunity, given the size of the market, the low penetration in the retail channel, and the pace at which it was growing.