@asingh i really don't know how much correct i am .
But according to me, it's really bad to sell item below your cost price, in order to gather more customers or have uphand in brand promotion, only due to the reason that you are getting handy funding from outsiders investor, this will go on for short span of time, but in long run, i am 100% sure flipkart won't be able to survive, when pressure will be put from the investor, for how long they can remain showing losses and attracting investors.
The same thing happened with yebhi.com. they went on giving items below their cost price, spending millions on promotions, using promoters money, when the funders taken their hand back to invest a penny more, they declared themselves bankrupt and take their hand away from selling items, and started as affiliates for other sites.
in one way, flipkart is destroying the competition, at online level as well as local level, and when it get itself destroyed, it will lead to monopoly of some other store.
i too own a multi-brand footwear showroom, 70% of my target target customer are youngster, we are forced to offer discount only 2-3 month in year, and rest of the year we are forced to give discount from our margin which is generally in the level of 25-35%, now a days more than 50% of customer says, "Hey you are offering 25% off, same is listed in 1000 in flipkart, 1100 in jabong, 1200 in amazon", i have no other excuse other than saying that you can try and choose shoe here, but there you have see and try your luck.
due to this reason only, i am forced to
SHUTDOWN MY STORE , and now i am looking into culinary biz, although i might face competition from dominos, pizza hut kfc, but in no way they can offer Indian cuisines, and at rate which i am going to offer.