Flipkart deal wrapped, Walmart now eyeing deals in Brazil and Japan

The sun never sets on Walmart Inc.’s empire, thanks to its network of stores across five continents. But in the span of 10 days, chief executive Doug McMillon has begun dramatically redrawing the retailer’s map, and there’s likely more to come as it places bets to remain on top.

“All of a sudden, everything is in play,” said Dave Marcotte, an analyst at Kantar Retail.

In less than two weeks, Walmart has agreed to cede control of its British business to a competitor and spend $16 billion to acquire India’s e-commerce leader in its biggest-ever deal, fending off Amazon.com Inc. The wheeling and dealing show how McMillon is focusing on high-potential markets like China and India, finding partners to help it battle online and cutting loose middling businesses. He’s got more work to do, though, and subpar markets like Brazil and Japan might be next on his list.

Walmart’s far-flung international units don’t get much attention, but they’re important as a source of cash, management talent and ideas that percolate into its core U.S. operations. Sales growth outside the U.S. once topped more than 10 percent annually, adjusted for currency moves, but it’s less than half that now as sluggish economies, store closures and fierce competition have taken their toll.

Flipkart will become Walmart today: Is that really good news for India?

When Carl Douglas McMillon, president and chief executive officer of Walmart Inc, arrives at the Embassy Tech Village headquarters of Flipkart in Bengaluru later on Wednesday to acquire India’s first-to-a-billion-dollars-startup, he will be accompanied by Walmart International’s Judith McKenna and CEO (commerce) Marc Lore. It will be a triumphal return to India for the Bentonville, Arkansas-based retailer which will be partnering Google’s parent Alphabet Inc in a deal estimated at $18-20 billion enterprise value – Walmart will own about 60 per cent stake, and Alphabet will get to own about 15 per cent of the online market place.

The passage of the past five years has obviously dulled memories. All recent media reports seem to have conveniently glossed over the history of Walmart’s previous foray into India, in partnership with Sunil Mittal’s Bharti group. Walmart in 2012 launched a global review of corruption after a New York Times report on bribery at the company’s Mexico operations. The review by its lawyers flagged India among the countries with the highest corruption risk. The US Foreign Corrupt Practices Act forbids American firms from paying bribes. Almost on cue, in November that year, Bharti Walmart suspended a number of employees, including the chief financial officer, as part of an internal investigation into bribery allegations in the Indian operation. By June 2013, Raj Jain, the CEO of the India operations, quit after six years at the helm of the company. It did not take much time thereafter for the Walmart-Bharti JV to fall apart.