Flipkart posts net loss of Rs.281.7 Crores

vyral_143

vyral_143

Jarvis
Staff member
Super Mod
Flipkart India Pvt. Ltd, the wholesale business of India’s largest online retailer Flipkart, reported a loss of Rs.281.7 crore in the year ended March, much wider than its loss of Rs.109.9 crore in the previous year, as it significantly raised spending to increase revenues. Revenue soared fivefold to more than Rs.1,180 crore from Rs.204.8 crore in the previous year, documents filed by the company with the Registrar of Companies show.
Click to expand...

Source

Its strategy of acquiring market share at any cost is sited the reason behind this.
 
Last edited:
No link.

204-110cr

1180-281cr

As a business leader, second seems a much, much, much better number to have. For one, the loss margin has come down by a factor of three.
 
The percentage of loss on revenue seems to have gone down. All the pivoting has worked. But 1180 crore is not much. Guess they will be burning more VC to get to a good place.

EDIT -Cranky got it before me. :p
 
What about the bansal's combined salary of about 40-45 Cr . Also this doesn't include any profit made by WS Retail Since its a separate entity at least in the eyes of law
 
Competition is finally good for consumers like us. And i think flipkart might have not felt any threatened by likes of shopclues etc and such gazillion Indian shopping websites but when amazon.in arrived, the would have started to panic.
 
I was comparing prices for computer products from FK and prime. Each item was priced at least 600 more by wsretail compared to prime. Total I got on prime was 17.4k whereas on fk it went to 18.8k for just three items. For another configuration price difference was much higher with fk around 3k higher in price. :eek:
Buying computer parts from store seems better option to me now.
Weird thing is inspire of charging so high these guys are in loss? Must have siphoned off money to their sister companies as loan or giveaway.
 
Computer spares are a very small part of FK's business. I'd assume less than 5% of their gross margin comes in through this, maybe even less. They can drop it tomorrow and not be worse off. Margins come in from lower ticket size items from smaller manufacturers, where they can buy aggressively. The reduction in losses with a huge growth in revenue points towards very efficient buying and good inventory management. PC spares has reduced significantly in prominence as the inventory has spanned various categories. The biggest loss is in the original portfolio of books and music, where there collection is gradually weakening due to piracy (I assume) and the dropping interest of the general population in complicated items such as books.

You'd be surprised at the number of businesses - specially clothes and fashion - willing to operate at 5% or less in order to use up spare capacity. Therefore a 50% cost plus 5% margin leaves FK with a gross margin of 45%. Even after a 30% discount they have a total margin of 15%, which is massive compared to retail. PC spares, OTOH, operate on a total margin of 5% or less end-to-end, that's 95% cost and 5% margin. There is simply no room to maneuver. Even local retail will tell you so. Unlike the US - which is a frequent basis of comparison - real estate costs here are lower because retail units are smaller and based in more informal rental structures. Labour is cheaper because you don't have hundreds of employees, just a couple. It is still easier and cheaper to do business in retail stores in India, at least at the moment - typically the bottleneck is the distributor, which is common to both FK and local retail. Consumer empowerment is a long way away in India, given the quality and vision of people who run these kind of businesses and the tax, legal and law enforcement structures.

FK did make sense early on for PC spares and maybe now they don't. Still, they do have some advantages - e.g the very sparse availability of WD Green drives in Calcutta, or the fact that a trip including two cab fares automatically adds about 250 bucks to the purchase price of anything. A lot of retailers have a home delivery service now to counter online sales. If you look at online stores only for prices, you will come off disappointed for sure.
 
raksrules said:
Competition is finally good for consumers like us. And i think flipkart might have not felt any threatened by likes of shopclues etc and such gazillion Indian shopping websites but when amazon.in arrived, the would have started to panic.
Click to expand...
Given fk recently got a nice infusoin of venture capital, the bet is that amazon isn't seen as a threat to FK. Not in the short term.
 
6pack said:
I was comparing prices for computer products from FK and prime. Each item was priced at least 600 more by wsretail compared to prime. Total I got on prime was 17.4k whereas on fk it went to 18.8k for just three items. For another configuration price difference was much higher with fk around 3k higher in price. :eek:
Buying computer parts from store seems better option to me now.
Weird thing is inspire of charging so high these guys are in loss? Must have siphoned off money to their sister companies as loan or giveaway.
Click to expand...
Disagree.

I don't know what parts you bought but there are cases in which I have found FK to be equal or even cheaper. I'm sure going to Lamington Road is going to be redundant soon.
 
windhawk91 said:
Disagree.

I don't know what parts you bought but there are cases in which I have found FK to be equal or even cheaper. I'm sure going to Lamington Road is going to be redundant soon.
Click to expand...

You are free to disagree.
I was comparing between wsretail and prime. The other sellers on fk do not ship to my place.

I haven't bought anything yet. The only time I found something really cheap on FK was some 15% electronics sale when I got a gfx card for 4.7k whereas others were selling it for 5.5k+.
Its a one off case though and probably won't return since there's a likelihood that FK might be phasing out the electronics section soon. Like TV's & music disappeared, computers section could disappear too since there's not much margin in that field.
 
6pack said:
I was comparing prices for computer products from FK and prime. Each item was priced at least 600 more by wsretail compared to prime. Total I got on prime was 17.4k whereas on fk it went to 18.8k for just three items. For another configuration price difference was much higher with fk around 3k higher in price. :eek:
Buying computer parts from store seems better option to me now.
Weird thing is inspire of charging so high these guys are in loss? Must have siphoned off money to their sister companies as loan or giveaway.
Click to expand...
Hah. Totally true.
Even on books, the price difference between FK and other sites like URead & BookAdda is nearly in the range of at least 20% ! Ordered 4 books from URead + BA combined, with a total cost of ~3300. Same ones on FK were costing 4200 ! 900 bucks saved. And having been used Uread and BA extensively this year, totally satisfied with their service. Excellent CS, fast shipping.
 
Nexus 7 for 8k . Where else will you get this price with warranty and 30 day return policy . I buy frequently from them and have no complaints .
 
ankushv said:
Nexus 7 for 8k .

Where else will you get this price with warranty and 30 day return policy . I buy frequently from them and have no complaints .
Click to expand...
Most if them were like faulty devices and factory seconds, with some problem or the other. Just check desidime.com, ull realise, it's not just 1 or 2,almost 3 out of every 4 n7 had problems, all were 2012 old stock.

India is a dumping ground, literally for everything.
 
Back
Top