Quick commerce investments in Flipkart, Myntra pressure Walmart International’s profit margins

Walmart’s aggressive bet on India’s booming quick commerce market is beginning to show up in its financials. The US retail giant, which owns Flipkart, Myntra and PhonePe, said its international gross profit rate took a hit in the June quarter, dragged down partly by investments into 15-minute and 30-minute delivery networks.

The comments highlight both the promise and growing costs of competing in India’s high-growth and high-burn quick commerce sector.

“In (the) International (business), 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,” said John David Rainey, chief financial officer and executive vice president, during Walmart’s Q2 earnings call.

India has been one of Walmart’s fastest-growing markets in recent quarters, with Flipkart and Myntra helping drive international top-line growth of 10.5 percent in the June quarter.

But, sustaining that pace means keeping up with rivals such as Blinkit, Instamart, Zepto and newer entrants like Amazon Now, who are spending heavily to expand dark stores, build fulfilment networks and capture festival demand.

Kathryn J McLay, president and CEO of Walmart International, pointed to Flipkart and Myntra’s growing scale in rapid delivery. “If you look at India, we now have 300 minute-fulfilment centres (MFCs), 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,” she said.

Walmart, is “positioning itself to take advantage of growth into the quick commerce channel” while managing efficiency by placing third-party inventory closer to consumers, McLay said.

The investments have been driven by fresh capital infusions over the past year. In May, Flipkart Internet, the marketplace arm, raised Rs 2,225 crore (around $262 million) from its Singapore-based parent, its fourth internal funding round in just over a year. Previous infusions include Rs 3,250 crore in April, Rs 1,421 crore in April 2024 and Rs 950 crore in March 2024, regulatory filings show.

Myntra received $125 million from FK Myntra Holdings in May, underscoring Walmart’s push to dominate fashion commerce through faster fulfilment.

For Walmart, the challenge will be to strike the right balance: funding the infrastructure needed to capture India’s rapid digital commerce growth while protecting profitability in its international portfolio. The bet is clear — short delivery times may be expensive now but could cement Flipkart and Myntra’s leadership in a market that global rivals cannot afford to ignore.