Walmart is the world's largest company by revenue recording $485 billion last year. It operates in 28 countries and employs a whopping 2.6 million people. Inspite of it being largely a brick and mortar retailer with nearly 12,000 stores, increasingly Walmart has a large online presence both for its sales and procurement.
Walmart every year outsources hundreds of millions of dollars worth of IT services work, including to some leading Indian IT companies. However some of the core work it has been pulling back and scaling up in its own captive operations in the country.
Indian companies are major suppliers to its global operations and Walmart operates wholesale stores in the country. More importantly technology chops from Walmart Labs India powers several of its global innovations, supply chain management and consumer technology offerings.
Started with just a handful of engineers in 2011, Walmart Labs today has 1400 employees in India, the second largest base outside its US headquarters.
Fiona Tan, Senior VP for Customer Technology at the company on a recent visit spoke to Venkatesha Babu about work being done out of India and why this was key to its vision of offering a seamless experience between physical and digital shopping experience. Edited Excerpts:
BT: Tell us about the kind of work that gets done out of Walmart Labs India?
Fiona: Let me just set the context. We recently reorganised earlier this year and are focused on three pillars, - customer, merchant and supply chain. And what we've also done recently is combined the ecommerce and the stores' technology team into one organization
So, within that organization, those are the three big pillars. I am responsible for customer technology pillar - it's everything that impacts or faces the customer from a technology perspective whether she decides to shop in the stores or the ecommerce customer experience around Walmart.com.
Then the merchant group is really focused on tech that's the merchant community would kind of interact with. And also includes our catalogue and search capabilities on the ecommerce space. It's supplier relationships. How do you set that up, how do you make sure that there is a program for them to onboard their items, how do you make sure that they are priced appropriately, how do you make sure that you are managing the catalogue. That's that merchant technology piece.
And then there's a supply chain technology piece, that's really focused on the supply chain, again both with the stores as well as the ecommerce properties and the management of the fulfillment centers and the distribution centers and the transportation network that helps with that.
So, really with all of those three, we also have two sort of more foundational layers that would be used across everything. It's a data layer, so if you can imagine Walmart, we have a lot of data and so making sure that that data is organized and available to all the appropriate business units as well as the tech pieces that go with it.
Finally there's also an infrastructure and kind of cloud layer, right. And so that's essentially how we've organized the tech organization and pretty much every single one of those, the three pillars as well as the two foundational layers have representation in India.
And so, from the point of view of Labs, you know we are hiring data scientists, data engineers for both the data layer as well as more application specific machine learning and data science. Obviously we are hiring engineers, product managers, designers. It really runs the whole spectrum on sort of the developers and engineering talent.
BT: This is literally at the cutting edge of what's happening in Machine Learning and Artifical Intelligence. Is there a large enough pool of talent here and are you able to attract them?
Fiona: We continue to invest here and are able to attract good talent. I think we've got really interesting problems to solve, right. So, for the technologist at heart, who think about Walmart scale, and the impact that they can have on the world community.
There's really no comparison if you think about it, right. There's 250 million people that shop with us every week. I mean, that's almost the population of the US, every week, right, and that's globally.
So those are kind of really staggering numbers again for the technologist at heart and if you can imagine having access to all that data and being able to you know run really interesting machine learning algorithms on it to be able to affect and impact the retail operations, we can usually do a good job in terms of attracting talent, just because they want to work on these tough problems, right. And so, I think we've done a good job of that.
I think we've got a really strong leadership team in India that have been able to really focus on bringing us good technical talent. We've also tried very hard to make sure that we organize the work accordingly so that India (operations) has sort of end to end ownership of the components that are done here.
And so, in a way it's good because there is that ownership accountability and they are very proud of their work and also it reduces a little bit of the wear and tear of work life balance when you are having to constantly communicate with the US, whereas if you have ownership, you have a little bit more - you are a little bit more insular.
BT: Can you give us specific examples of such work from Walmart Labs India?
Fiona: Yeah. So, one example would be this program that we call digital relationship. Doug McMillan, our CEO has really talked a lot about how do we integrate the physical and the digital, how do we make sure that we allow our customers to shop in the stores but also give them sort of the benefits of the digital experience.
So, this digital relationship initiative and it's quite large, is really trying to get the stores' customers, the offline customers to engage digitally with us. So that means that you know things like that are a little bit different than what you would find in a typical ecommerce app. So, if you say - look at Amazon, Myntra or whatever, it's mostly around buying, and that's about it.
If you look at our app, there's a lot of additional value-added features for the customers and it's really targeted to store's customers. So, you go to a store, you can pull up essentially a store map, it helps you find things in the store. It will help you jump the queue when you are trying to say do certain transactions like pharmacy transactions or financial services transactions or even returns. You can stage it on your map on the app...
BT: ..process it faster..
Fiona: Exactly. So, you see the customers, the store's customers are getting some of these advantages and conveniences that they wouldn't otherwise get. And this is all you know done on the app. We can kind of think of the app as your remote control in the store and actually this work is being done in India.
So, everything from the mobile engineers to the backend services, it really is again that end to end experience, and it's a very impactful and obviously very important initiative for us, because for Walmart it's really around how do you get that offline customer, the one that's going to the store, to engage with you digitally.
And we are really doubling down on this digital relationship initiative to kind of bridge that gap, like take them from just going to a store to actually shopping that's online as well.
I think one of the things as Doug has been talking about is how do we really marry the digital and physical. So, we have an online grocery pickup program in the US, and so it allows you to order your groceries online or on your app and then when you go to the store it's actually an amazing program, you can literally pull up your car, the associate comes up and drops the groceries into your car and you drive off right.
So, you never have to unbuckle the children, it's all very convenient. So, one of the programs that we are doing very critical to this particular initiative is essentially for the associates to be able to pick up all the groceries for these customers and stage it and get it ready so that when they come, they can put it into their car for them. So that kind of technology, what we call, store fulfillment system is again done partially here and partially in the US.
We have a good portion of the tech done here, some of the more user facing functionality is being done in the US, but a lot of the heavy lifting is done here. And it's a very - like I said, it's a very critical program, it's besides just obviously having your stores available for your customers to shop, it's also how do you use your stores almost as a fulfillment center, right.
What this program does is it tells our associates, what is the most optimal path to pick for all these online orders, they essentially push their little carts around, it tells them where, which, what to pick from which stores it goes and then you stage it.
And then when the customers come - it's actually a beautiful experience for busy professionals or just moms who don't want to bring their three screaming children into the store.
BT: To do that you have a lot of cloud and other technology infrastructure. Like Amazon Web Services would this be offered as a service to other enterprise customers? Would you bring Walmart Pay to countries like India?
Fiona: Right now, I would say we haven't really - we are not really considering that. I think we've been building up infrastructure and it's been really focused around allowing us to operate in as efficient a manner as possible. And we do feel at this point that you know, we are really focused on retail as a business and that's still our core competency and that's what we are still going to be really focused on.
In terms of some of the other things you talked about, in terms of wallets and payments, I think we continue to look at what the possibilities are, and we will continue to prioritize that as we continue to figure out Walmart Pay - we are trying obviously very hard to increase the adoption of that and it's been going well.
BT: What is the kind of relationships you've have with the Indian IT companies, both from Walmart's own perspective and from Labs' own perspective. There was some talk of pulling back some of those relationships and investing more internally - what kind of progress have you made on that?
Fiona: Yeah. I think we are continuing to make progress on that. I think that is something that we want to look at - to some degree maybe rebalancing the ratios of kind of own talent (to that of) service providers. We are always going to have providers that we are going to work with and there are definitely projects where it makes sense to work with third parties. But I think what we are also trying to do is especially as we are building up India and realizing that we were able to hire well in India. You know we decided that it would behoove us to go ahead and hire this really strong talent...
When we started Walmart Labs in 2011 in India, we were just a handful, so if you look at our journey in the last seven years, we've kind of grown to about 1400.
So, I would say that a lot of the next generation stuff we probably are biasing more towards full time associates that we want to obviously have around for a long, long time. And then you know we use service providers for whenever we need it, which happens quite a bit if you can imagine the company the size of Walmart.
So, it's good to still continue to have those strong partnerships with the different outsourcing companies, most of which are Indian outsourcing companies that have been able to support us when we needed.
BT: And in terms of engaging with the startup community, what's being done? And are there interesting startups here that could potentially be acquired?
Fiona: Oh, so we've definitely done acquisitions. We haven't done any large ones. I don't think we've done any acquisitions per se in India, but we've grown a lot even in the US through acquisitions and some of them were talent and technology acquisitions. In fact, I think until Jet, most of our acquisitions were really more based on talent and technology and we've been able to integrate those pretty well
With India specifically, I think we have been pretty active in terms of talking to the startup community to evaluate particular things that we could incorporate, and I know, especially in the emerging tech organizations there's been some explorations of companies that are doing things around catalogue management you know and content, so we've talked to several startups.
I think they have been some in the POC (proof of concept) stage. Again, nothing that we've acquired. Probably some that we have been testing out to see - as you know, the thing with startups is that usually have really interesting technology but they may not always able to scale.