The revenue of Walmart International, which includes Flipkart, rose 5.7% YoY in the June quarter to $24.4 billion.
Walmart International chief executive officer (CEO) and president Judith McKenna had said in June that
India is Walmart’s biggest market for advertisement revenue.
“The new profit pools are really interesting. They’re our biggest market by a long way for advertising revenue,” she had said.
Prakash Sikaria, senior vice-president of growth and monetisation of Flipkart,
had told ET in an interaction in early July that ad revenue constitutes 2-3% of Flipkart’s gross merchandise value (GMV).
GMV is the total value of goods sold on a marketplace over a period of time.
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In 2021, Walmart clocked $2.1 billion from its ad business worldwide compared with Amazon which generated $31 billion in ads revenue. Walmart also uses Flipkart’s advertisement technology in other markets such as Chile.
Ads have become an important revenue stream for ecommerce companies as they can make profits from operations by giving sellers tools and software to advertise on marketplaces for better discoverability. For Walmart, it is the fastest growing revenue stream.
To simplify how this works, a dental care brand could bid for keywords such as ‘toothpaste’ to make sure their products appear on top of the search list, thereby increasing sales. These tools have emerged as lucrative ways for sellers to drive sales on such marketplaces.
Companies can also bid for banners on the home page of ecommerce websites and target specific customers through ads.
India is among the four key markets outside the US for Walmaret after Canada, Mexico and China. The American retailer is present in over 23 countries outside the US, and together they contribute to over $100 billion in revenue for Walmart, which is about 18% of the its total revenue.
