Shulou(Shulou.com)11/24 Report--

On the morning of November 7, Beijing time, Karyan Krishnamursi, CEO of Wal-Mart's Indian e-commerce platform Flipkart, reportedly said last week that Flipkart would cut transactions and hiring to control costs. Flipkart's losses are rising sharply in the face of fierce competition from Wal-Mart and Reliance Group.

Krishnamucci said the recent funding crunch in the global technology industry means that Flipkart will end its ongoing acquisition activity for some time. Flipkart spent $500m on a series of acquisitions to diversify its business into areas ranging from travel to online health care. "We have stopped or suspended these mergers and acquisitions," he said. as a company, we have decided that in the next year or two, we will ensure that these investments are accepted by a large number of users, followed by the next round of acquisitions. " In addition, Flipkart will not lay off staff, but will "significantly reduce hiring".

In the fiscal year to the end of march, Flipkart's parent company, Flipkart Internet Private, posted a loss of more than 50% year-on-year to 43.6 billion rupees ($528 million). Wal-Mart, which was an early star of India's e-commerce industry, bought the company for $16 billion in 2018.

The size and potential of the Indian e-commerce market has attracted the attention of many large companies, from the international giant Amazon to large Indian groups, such as Mukesh Ambani's Reliance Industries and Tata, which have launched e-commerce businesses. However, Flipkart's financial performance shows that India's relatively young ecommerce industry remains challenging. In the last fiscal year, Flipkart's revenue rose more than 30% year-on-year to 106 billion rupees, but rising advertising and logistics costs still caused losses.

Last month, a joint report by Bain and Flipkart estimated that India's ecommerce consumer base would double from less than 200m to more than 400m by 2027, thanks to the growing popularity of smartphones and digital services.

Satish Minah, an independent analyst, said Flipkart remained the Indian market leader in major ecommerce categories such as fashion and smartphones. However, in fast-growing areas such as fresh department stores and social ecommerce, it is harder for Flipkart to keep pace with Reliance and Meesho. Meesho had previously received investment from Meta, the parent company of Facebook. "it is not clear when they will be profitable at the moment," Minah said. "these companies will increase spending and continue to spend money."

Mr Krishnamursi said Flipkart had invested heavily to expand the supply chain and launched new projects such as Shopsy. Flipkart launched the Shopsy platform last year, targeting sinking consumers outside India's big cities. He believes that India's e-commerce market is large and growing fast enough to accommodate many large companies. "given the overall size of the market, the industry is still full of vitality."

On the issue of profitability, Krishnamursi said, "We invest cash today to build products, technologies and supply chains for emerging businesses, such as travel. We don't need to continue to spend money to develop businesses that started five to 10 years ago, but more about the future."

He also denied that Flipkart needed further financing and said the company would consider going public once the global market turmoil stabilized. Last year, Flipkart received $3.6 billion in investment, valuing it at $37.6 billion. Wal-Mart, the main shareholder, as well as Softbank Corp. and Singapore's sovereign wealth fund GIC (GIC) jointly led the round.

"maybe in a year's time, we will discuss with the board how to go public," he said. "

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