New Delhi: E-commerce giant Flipkart registered a loss of around Rs 2000 crore in the year ended March, amounting to one fith of its sales, the economic Times reported citing regulatory filings.
According to the report, two entities controlled by e-commerce player-- Flipkart Internet which runs the consumer-facing portal and Flipkart India company's wholesale arm registered a net loss of Rs 1,096.4 crore and Rs 836.5 crore respectively.
India's leading online market place spends heavily to fund discount to stay ahead of its rivals Snapdeal and Amazon India.
The current loss figure has trebled as last year the company witnessed a loss of Rs 715 crores.
Flipkart, which has raised $2.6 billion over the past 18 months, has been spending huge amounts of money on discounts, marketing, boosting technology and building warehouses.
India's ecommerce companies are said to be getting more circumspect with discounts as they seek to shore up their balance sheets.
"The current model of Flipkart doesn't make any economic sense as any company selling goods below manufacturing cost without any margin will always attract customers. But a sustainable business can't run like this and Flipkart needs to look for alternate revenue models such as advertising and data selling to make money,"ET quoted a CEO of a leading firm
Flipkart sources goods from manufacturers, sells those goods to WS Retail Pvt. Ltd, a company with which it is closely linked, which in turn sells it to shoppers.
Flipkart also has more than 50,000 third-party sellers. The company provides the technology platform and logistics services and takes a commission on every sale on its site.
Flipkart (Company) was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian Institute of Technology Delhi. Flipkart now employs more than 33000 people. Flipkart allows payment methods such as cash on delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on delivery.
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