Flipkart's Q-Comm Expansion Weighs On Walmart Int'l's Q2 Gross Profit

Expansion of quick commerce capabilities in India weighed on Walmart International’s gross profit rate in the quarter ended July 2025 (Q2), said Walmart CFO John David Rainey.

“In International, gross profit rate declined with continued pressure from channel and format mix, as well as strategic investments in price across markets and our quick commerce capabilities in India,” Rainey said during the Q2 earnings call.

Not just this, growth investments in India, as well as Canada and Mexico, also took a hit on Walmart International’s operating income during the quarter under review.

For context, Walmart International’s overall gross profit rose a mere 1.7% to $6.7 Bn in Q2 from $6.6 Bn in the year ago period. Meanwhile, operating income, in constant currency terms, declined 2.8% YoY to $1.3 Bn in the quarter under review.

On the retail giant’s quick commerce expansion in India, Walmart International CEO Kathryn McLay said that Flipkart boasted 300 “minute” fulfilment centres (MFCs) that cater to customers in less than 15 minutes. She added that fashion ecommerce business Myntra also operated 60 MFCs that delivered to customers within 30 minutes.

“… If you look at kind of India, we now have 300 minute FCs, which enables us to get to the customer in less than 15 minutes. And we have 60 MFCs for Myntra, which enables them to be able to get to the customer in under 30 minutes. So we’re beginning to position ourselves to be able to really take advantage of this growth into the quick commerce channel, but to do it efficiently by ensuring that our third-party inventory is placed closer to the consumer,” added McLay.

Meanwhile, Flipkart continued to power Walmart’s international advertising business, which rose 15% YoY during the quarter under review. The Indian ecommerce also continued to be a big growth lever in bolstering the US-based retail giant’s global sales.

“From a segment point of view, we grew International sales by 10.5% in constant currency, led by China, Walmex, and Flipkart. International continues to help lift our top line growth rate,” added Rainey.

This quick commerce cash burn comes at a time when Flipkart has set a nifty target of setting up 800 dark stores by the end of 2025. With just 300 stores in its kitty at the end of July 2025, the company has its task cut out as it looks to set up the remaining 500 fulfilment centres in just five months.

In any case, this could result in heavy cash burn for the company as it is gearing up for its IPO next year.

Making matters worse for Flipkart is its fashion marketplace arm Myntra turning to rivals Shadowfax and Delhivery for quick commerce deliveries instead of relying on its in-house logistics platform Ekart.

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