Flipkart losses double to Rs 2,306 crore last fiscal
Flipkart Internet Private Limited, company operating the online commerce platform of Flipkart.com has seen its losses more than double to Rs 2,306 crore in the financial year ended March 31, 2016.
Last financial year, the company reported Rs 1,096-crore loss and it has doubled this year. Losses were up by 110%.
The Bangalore-based company has been trying to give fierce competition to Seattle-based rival Amazon, which is outspending Flipkart to win the top spot of the Indian e-commerce market.
Both Flipkart and Amazon have a slew of companies registered in India, which run their business across commerce, logistics, wholesale and payments. Flipkart Internet owns e-commerce platforms Jabong and Myntra. These units get capital infusion from investment holding companies registered overseas.
Even as losses mounted due to heavy discounting, delivery and overall user acquisition costs, Flipkart’s sales grew more than twice from last year to Rs 1,952 crore at the end of March 31, 2016, compared to Rs 772 crore a year ago.
During FY16, e-commerce companies including Flipkart and Snapdeal were under pressure to curb losses by reducing cash-burn and make sales profitable.
In FY15, leading e-commerce companies Amazon, Flipkart, Snapdeal collectively reported total losses of Rs 5,000 crore on the back of heavy discounting and large marketing and promotional expenditure. Flipkart Internet’s rivals – Amazon Sellers Services and Jasper Infotech are yet to release their financials for FY16
In late October, the company’s CFO Sanjay Baweja quit, Sachin Bansal was removed as its chief executive and replaced by Binny Bansal. It also laid off 700 employees due to lack of individual performances. Flipkart recently opened up the option of seeking help from Investment bank to raise funds.