Will the Competition with Amazon Kill Flipkart?

Flipkart is incurring heavy losses due to intense competition in the ecommerce space, especially against Amazon. According to a news published by Economictimes.com, Flipkart has reported heavy losses in the last fiscal which are to the tune of Rs 2,306 cr. These losses are constantly mounting further as the global e-commerce giants are trying to race against time to gain leadership in the Indian market.

In the last fiscal, Flipkart had pledged to decrease the chasm between its top line and bottom line and had introduced a range of key changes in the leadership. It tried to implement a bevy of key measures to make the company profitable and increase its valuations. But the drive did not help. Its valuations slid constantly. Its investors brought valuations down to $9 bn from $15 bn earlier this year. Many were forced to think that the company is losing its significance in the domestic ecommerce market. And since Flipkart is the biggest ecommerce player in the Indian market, its devaluation did not augur well for other startups in the country. Investors tried to put their money in alternate channels.

Indian e-commerce market continue to pose challenges to all startups in the space. But if Flipkart loses battle against Amazon, it would be a loss of million bolts. Flipkart has become synonymous to ecommerce and online buying in India. It is high time that the company reinvents its ways and sustains its connect with customers. Making profits in the e-commerce space might not be easy and near time but it has to ensure that it does not become victim to mindless competition. Particularly after the government has changed e-commerce rules, the local players are under intense pressure to perform or perish. Global ecommerce players are pumping money in the Indian market and trying to galvanize the marketshare.

According to the news in the Economic Times, in FY15, Flipkart Internet and Flipkart India reported a combined loss of Rs. 2000 cr and combined sales trebled to Rs. 10,390 cr. According to the reports, Flipkart India accounted for 90% of the sales.