flipkart, ebay india

Flipkart India, the largest unit of the e-commerce firm Flipkart, has reportedly been able to minimize its losses and boost its revenue for the year 2015-2016. As per the regulatory filings, the company was able to increase revenues by 43% and cut losses by over 34%.

This news comes at a time when the investors of the company has began to mount pressure to see tangible results. Flipkart has set up a complex holding structure, with many entities listed in Singapore, making it hard to ascertain the exact revenue and loss figures.

Flipkart India Pvt. Ltd, the wholesale cash-and-carry entity, posted revenue of Rs. 13,177 crore, up 43% from Rs. 9,226 crore in the previous year. Loss during the period has narrowed to Rs. 544.6 crore from Rs. 826.7 crore in the previous year.

The two Flipkart entities together earned roughly Rs. 15,129 crore in 2015-16, compared to Rs. 10,390 crore in the previous fiscal. The combined loss for two entities mounted to about Rs. 2,850 crore, compared to about Rs. 2,000 crore a year earlier.

The company said that it had reserves of about Rs. 6,354 crore in a securities premium account at the end of 2015-16. In November this year, Flipkart Internet had reported around two-fold increase in loss to about Rs. 2,306 crore on revenue of Rs. 1,952 crore for 2015-16.

In comparison, Amazon India’s revenue more than doubled in 2015-16, but so did its losses. The India operations of the American e-commerce giant went on to topple Flipkart from its number 1 position. It reported a loss of about Rs. 3,572 crore.

Since restructuring its senior leadership under CEO Binny Bansal, the company has aggressively slashed costs and more than halved its monthly burn rate to roughly about $40 million. However, the company is still spending a lot of money for boosting technology and building warehouses, among others to compete against Amazon India.

To be at the pole position in the Indian e-commerce market, Flipkart needs to spend more money towards marketing efforts and discount offerings, that too, while keeping losses in control. For this, it soon needs to raise capital, for which, the company is struggling due to a series of valuation markdown.

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