All's not well with Flipkart, reports a loss of Rs 2,000 crore

Combined sales of two main entities controlled Flipkart trebled to Rs.10,390 crore.

Zee Media Bureau

New Delhi: Online e-commerce company Flipkart posted a loss of over Rs 2,000 crore in the year ended March 2015 as against Rs 715 crore the previous year, as per a report in the Economic Times.

Combined sales of two main entities controlled by the online giant – Flipkart Internet Pvt. Ltd and Flipkart India Pvt. Ltd trebled to Rs.10,390 crore last fiscal year, the ET further said.

"Flipkart Internet, which runs the consumer-facing portal, registered a net loss of Rs 1,096.4 crore, while that of Flipkart India, the wholesale arm, was Rs 836.5 crore", ET said, citing Registrar of Companies filing.

Most e-commerce companies are operating at a loss because of the heavy investments being made to build the back-end and delivery infrastructure. Since these companies are privately held, they do not disclose their financial results.

With the onset of the festive season, Flipkart started pouring huge discounts to woo shoppers with best deals and grab market share.

The company has invested heavily on bringing the best deals for customers across categories like apparel, electronics and household items as well as on logistics.

Investors have also pumped in millions of dollars to build the infrastructure and grow the ecosystem. While the number of transactions and sales through such platforms have zoomed, industry experts have also criticized the huge discounts offered and expressed concerns of inflated valuations.

It may be recalled that last month, co-founder Binny Bansal has said that he is hopeful that Flipkart will become profitable in the next 2-3 years and expecting to launch its IPO in 2-5 years.

Flipkart, itself, has raised closed $2 billion from investors like Tiger Global, Naspers and GIC, Singapore's sovereign wealth fund. The company is valued at over $10 billion currently.

Flipkart has 45 million registered users clocking 10 million daily visits and delivers about eight million shipments per month.

With Agency Inputs