In a respite of sorts for e-commerce company Flipkart, American mutual fund Variable Annuity Life Insurance Company (VALIC) has marked up its shares by 10%.
According to a regulatory filing with the US Securities and Exchange Commission (SEC), VALIC marked up the investment to $108 per share as of May 2016, up from $98 in February this year. However, in February 2015, Valic had valued its shares at $119 apiece.
This is the second mark-up for Flipkart this quarter — following another mutual fund investor Fidelity Rutland Square Trust II, raising its valuation by 2.7% to $84.29 per share in May, from $82 per share in February.
However several of Flipkart’s other investors such as Morgan Stanley, T Rowe Price and Vanguard had reduced the e-tailer’s valuation over the last six-to-seven months. Both Fidelity and Valic had marked down the shares of Flipkart by about 32% and 17.5%, respectively, from last year’s levels in February this year.
In FY15, Flipkart, Amazon and Snapdeal together incurred losses of R5,000 crore, up five-fold over FY14 losses of R1,100 crore. Losses for FY16 are expected to be even higher. Flipkart has seen a couple of top-level exits in recent times with Mukesh Bansal, head of commerce, and Ankit Nagori, chief business officer, exiting the company.
Data received from app analytics firm, which did not wish be quoted indicated that while Amazon India was adding customers at the rate of a million a month in the first six months of 2016, Flipkart was losing them even faster. In the six months to June, Amazon attracted 6 million of what are called active users on its mobile app segment. According to Similarweb and Alexa data, Amazon India continued to be a leading desktop website as compared to other e-commerce players.
In its effort to take on Amazon Prime, Flipkart recently launched its very own content programme, called Content-2-Commerce and has partnered with several online content creators including The Viral Fever (TVF), Scoop Whoop, FilmFare – an English bi-weekly tabloid magazine, PING – a multi channel network on Google, among others.
E-retailers in India have been reporting losses in an attempt to attract buyers with large discounts. In the latest guidelines, however, the Department of Industrial Policy and Promotion has barred marketplaces (with foreign direct investment) from influencing the price of the merchandise.