Walmart Inc., the world’s largest retailer, is looking to double down on investments in its e-commerce business, hire more top tech talent from countries like India, and invest in or acquire Indian tech start-ups, amid a bruising global battle against Amazon.com Inc., even as it inches closer to a deal to acquire a majority stake in India’s largest internet start-up, Flipkart Ltd.
In an interview on Monday, Walmart’s chief technology officer Jeremy King said the company would continue to expand aggressively in India, where it built out its largest technology centre outside its home market a few years ago. King, however, declined to comment on Walmart’s current talks with Flipkart.
“My focus is really taking some of the same strategy we have from a tech perspective—we’ve acquired 13 companies and we would love to do that here in Bengaluru as well. The last time we were here, we met a bunch of start-ups. My goal is to pick up somewhere between three and five start-ups in the next year or so, because we’ve had a lot of success in the US with that. It never ceases to amaze me to see how many start-ups are getting cranked out from Bengaluru,” said King.
Mint first reported on 17 February that the Arkansas-based retailer may end up taking a large stake in Flipkart at a price that could value India’s largest e-commerce firm between $20-23 billion. The Economic Times had reported on 31 January on the initial talks between Walmart and Flipkart.
Over the past few years, Walmart has made significant strategic investments and acquisitions to advance its e-commerce ambitions. In 2016, Walmart bought US-based online retailer Jet.com for $3.3 billion, while the same year, Walmart acquired a 5% stake in China’s second-largest e-commerce firm JD.com.
“The Jet acquisition was a big moment for Walmart.com. The teams have all been integrated now. It has been a great acquisition. We got some very strong business talent,” said King.
The chief technology officer, who has been at the centre of Walmart’s e-commerce push over the past 7-8 years, indicated that the company would continue to advance its e-commerce ambitions at the same pace over the next few years, with its technology centre in India playing a key role in that push.
“We use India as a tech centre. We’ve been more than happy with the talent here and how fast we’ve grown. We have strong technology teams in Arkansas, New Jersey and California, and Bangalore is our one main remote site outside the US. We’re hoping to grow the team here more,” said King.
“The appetite is very strong. The key is to find start-ups that are aligned to our strategy from a product perspective or that have very strong talent,” said Hari Vasudev, vice-president of technology at Walmart.
The aggressive investments in e-commerce and the current talks with Flipkart come at a time when the growth of Walmart’s global e-commerce sales witnessed a slowdown in the December quarter, declining to 23%, compared to 50% growth in the preceding quarter.
Over the past five years, Walmart has spent several billions of dollars to expand its e-commerce business, as part of a broader strategy to close the gap with Amazon, the world’s largest online retailer. While those efforts have borne fruit, the company still trails Amazon significantly in the e-commerce business.
According to digital research firm eMarketer, Amazon currently holds a 43% share of the US e-commerce business, while Walmart has less than a 4% share.
King, however, indicated that Walmart was happy with its e-commerce growth so far.
“Our growth (in e-commerce) really speaks for itself. Over the last year, we talked to the Street about growing the e-commerce business by 40% and next year our ambitions are to grow another 40%. We are happy with that,” he said.
“Having physical locations and stores and great associates is a competitive advantage in e-commerce—it sounds counter-intuitive but it’s true,” King added. “The number one asset that we have as a company for e-commerce is our stores. Being more customer focused is really what we’re after.”
As part of its push to grow out its e-commerce business, Walmart is investing heavily on its online grocery business, King said. “We’re spending a huge amount of time and resources on online groceries. The experience is great, it could be even better. We’re growing extremely fast over there,” he said.