The Supply Side: WalMex, India’s PhonePe grow ecosystems inside Walmart International

Walmart International’s revenue reached $114.6 billion last year, which represented 18% of Walmart’s consolidated sales in fiscal 2024. The business sector holds tremendous growth potential in some of the world’s most populated and fastest-growing countries.

But Walmart is committed to more than retail sales in markets like Mexico and India, where Walmex and PhonePe, which was part of the Flipkart acquisition, are building customer services that include internet connectivity, medical care access, booking travel and buying insurance.

Beatriz Nunez, chief growth officer for Walmart Mexico and Central America, recently said Walmex operates in six countries with 3,900 stores and is dedicated to meeting customers wherever they are.

“About five years ago, we asked customers how we could serve them better and what else they needed from Walmart. They told us help was needed with real-life challenges as connectivity was sparse in many places, healthcare and financial services were also out of reach for many,” Nunez said.

About four years ago, Walmart launched BAIT, a virtual mobile operator in Mexico that facilitates connectivity for users who purchase it. The cost is 49 pesos, and it gives users exclusive promotions on portable internet. Nunez said through BAIT, consumers get mobile data and voice service on prepaid service with unlimited connectivity with national and international coverage. In 2022, Walmex built out BAIT Experience Centers for Mexico’s 4.3 million active users.

Nunez said the BAIT Experience Centers allow Walmex to include mobile and home internet. She said BAIT has grown to 13 million active customers, and the service is 17% cheaper than the nearest competitor. Once customers are connected via BAIT, Walmart can help with medical care. In Mexico, Walmart has 1,500 pharmacy centers and 500 medical clinics that provide customers with physical and virtual visits for $2 a month.

Walmex also offers Cashi, a digital wallet with up to a 10% balance bonus on purchases made in participating stores and clubs. Customers may also collect money transfers through the remittance service at Bodega Aurrera, Walmart Express and Walmart Supercenters. She said customers can also request a digital credit in Cashi in minutes to purchase electronics, white goods, and appliances and take advantage of promotions and bonuses. Nunez said because Walmart works with customers to receive remittances, those connected with BAIT can also see lenders and financial institutions that partner with Walmart and lenders that consider the remittances as proof of income for loans.

“We are helping consumers in Mexico who have no car and no job while raising children as their husband works in the U.S.,” Nunez said. “Perhaps a parent also lives with them. Because we can help consumers connect with BAIT, they can find other services they need. We are building loyalty with these consumers on many levels.”

Scott Benedict, CEO of Northwest Arkansas consulting firm Benedict Enterprises, said he spent four years working in Walmart International during his 15-year tenure at Walmart and Sam’s Club. He said Walmart has always used its experience and best practices in all the markets in which it operates. He said Walmart’s presence in Mexico is paramount, and it’s also a market with a fast-growing younger consumer base. He said the BAIT connectivity service is foundational for consumers in a market where so much is accessed online.

“Walmart is solving real-world problems for customers in this case, and it drives deep loyalty to the brand while providing more growth opportunities,” Benedict said.

In the U.S., Walmart is dabbling with a financial tech business, but nothing compared to the scale of mobile payments giant PhonePe in India. Walmart owns a majority stake in PhonePe, which was part of its $16 billion acquisition of Flipkart. Flipkart has since spun off the fintech operation, and in 2023, Walmart invested another $200 million in PhonePe.

PhonePe CEO Ritesh Pai said the fintech operation was born in early 2016 as part of Flipkart, with the idea of democratizing the way digital payments are safe and affordable while being accepted across financial networks. He said digital payments were the initial hook to mainstream financial services built into the PhonePe app. He said PhonePe has 540 million users and processes 260 million daily transactions. PhonePe works with 39 million registered merchants, and the annualized value of transfers totals more than $1.5 trillion.

“There are 800 million smartphones in use inside India; it’s how consumers transact business and shop for goods and services,” Pai said during a recent visit to Bentonville.

Pai said PhonePe has since added insurance sales, travel booking, education, medical services, personal investment opportunities, and financial payments and remittances. He said when a mom-and-pop business signs up with PhonePe for digital payment collections, it also gets cash flow visibility. With the digital cash flow report, Pai said banks are more willing to extend credit.

Pai said PhonePe is just starting with a long runway of growth potential in the fastest-growing digitally native country on the planet.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Firebend.