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The Silicon Review Asia

Flipkart’s rivalry with Amazon results in a Rs 3,200 crore for the e-commerce company

Flipkart’s rivalry with Amazon results in a Rs 3,200 crore for the e-commerce company

The rivalry between Amazon and Flipkart has resulted in aRs 3,200 crore loss for the latter for FY18. Compared to the previous year, the loss is 70% higher as indicated by the regulatory filings of Flipkart India and Flipkart Internet. The losses for Flipkart India rose up to over Rs 2,000 crore, while Flipkart Internet reported losses of around Rs 1,100 crore.

Considering the rise in the losses, Flipkart has to resort to aggressive marketing and discounting in order to gain its foothold in the market.Though Flipkart is now a part of Walmart, the e-commerce company, according to analysts, still has to suffer losses until 2020 owing to the tough competition put up by Amazon. Walmart relies on Flipkart for e-tailing across the globe.SatishMeena, senior analyst, Forrester India, said, “Amazon narrowed its gap with Flipkart in the recently held annual flagship sale and it will only want to corner more market share, something that Flipkart will try to defend aggressively too.

However, the two Flipkart entities, Flipkart India and Flipkart Internet generated a revenue growth of 42% and 36% in fiscal 2018 respectively. They also saw a rise in their total expenses, where Flipkart India’s expenses were up by 50%, while employee benefits’ cost for the wholesale arm was over Rs 330 crore as compared to Rs 166 crore in the previous year. On the other hand, Amazon isn’t lagging behind. It is said that it has already exhausted its $5 billion investment committed to India.

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