The world's largest company by revenue, the $486 billion worth Walmart's acquisition of homegrown startup Flipkart for $15 billion will likely make it the biggest MNC operating here. The combined entity will have annual business of $10 billion from India. Walmart's global CEO Doug McMillon arrived in Delhi late Tuesday night to sign off on the Flipkart deal. The contours of the deal will be announced by Wednesday evening.
However, very little is known about Walmart's India operations apart from Walmart India's $500 million wholesale cash and carry business - Best Price. For instance, Walmart Inc already sources nearly $3 billion worth of goods for its international stores from Indian firms. Over and above that, it also has another $3 billion worth of pharma (mostly generics) sourcing from India. At Rs 67.25 to dollar, Walmart already does business worth Rs 43,700-odd crore from India. With Flipkart-Myntra-eBay-Jabong revenues of Rs 22,911 crore in fiscal 2016-17, this adds up to nearly Rs 67,000 crore.
That's well past the second largest MNC operating in India, Rosneft's Essar Oil (Rs 63,722 crore in 2016-17), and just short of the biggest MNC Maruti Suzuki India's Rs 70,418 crore.
That equation, however, may change when the final numbers for fiscal 2017-18 are compiled. Maruti has already declared its total income at Rs 79,600 crore for the fiscal. While Walmart India's wholesale business is growing at 15-16 per cent per annum, Walmart's sourcing from India is growing at 8-9 per cent per annum. But Flipkart is projected to close fiscal 2017-18 at $4.6 billion (Rs 30,935 crore), nearly 50 per cent higher than the previous year. Myntra-Jabong business also grew 40-50 per cent. At these rates of growth, the combined Walmart-Flipkart business is likely to match or surpass Maruti's revenue in 2017-18.
Walmart India, which opened its first wholesale store in 2009, had opened its sourcing office in India four years before that in 2005-06. It has since already established 21 cash and carry stores under the 'Best Price' brand while five-seven more are being added this year. It has targeted 50 stores in the next three-four years with 15 stores to be built the next year alone. Each store built on nearly 4 acres of land has 50,000 square feet of shopping area. Its domestic business is growing at a CAGR of 15-16 per cent per annum. Walmart India's 'Best Price' cash and carry stores source 97 per cent of products sold from Indian suppliers.
Its sourcing business procures goods worth $3 billion from India, largely comprising of textiles, handicraft, apparel and home furnishings. The pharma sourcing is mostly generic drugs sourced by Walmart's UK arm to be supplied to the retail giant's stores across global markets. India is the world's largest supplier of generic medicines by volume. Walmart Pharmacy is America's 5th largest pharmacy chain with annual prescription revenue topping $20.5 billion in 2017. It accounts for 5 per cent of America's prescription sales.
The 55-year-old Walmart Inc has already grown into a behemoth whose size often inspires awe. It has 22 lakh employees, which makes it the world's biggest employer behind US defence services and the Chinese People's Liberation Army. Walmart is already the world's largest retailer operating more than 11,700 stores under 65 brands in 28 countries. If Walmart was a country, its sheer size would make it the world's 28th largest by GDP - ahead of Pakistan, Bangladesh or Sri Lanka.
The Walton family that founded Walmart still owns nearly 50 per cent of the company's equity, making them one of the world's richest families.