Flipkart and Amazon sold goods worth $3 billion in the six-day festive sale that ended on October 4, a report by market research firm RedSeer Consulting showed.
Flipkart Internet, the marketplace entity of the e-commerce major, reported losses of Rs 1,625.7 crore in the year to March 2019 on a consolidated basis compared to losses of Rs 1,160.6 crore posted in FY18. Revenue from operations, however, increased by 52% to Rs 4,234.5 crore in FY19 compared to FY18, according to the company’s RoC filings, sourced from business signals platform paper.vc.
The rise in losses comes as the battle between Walmart-controlled Flipkart and Amazon to grab a larger share of the burgeoning e-commerce market intensifies. Analysts say that the companies spend heavily on customer acquisition and beefing up infrastructure.
Both the firms jointly hold 80% market share in India’s e-commerce sector, according to analysts. Flipkart and Amazon sold goods worth $3 billion in the six-day festive sale that ended on October 4, a report by market research firm RedSeer Consulting showed.
While US-based Walmart has been trying to get into the Indian retail market for more than 10 years, the government’s policy that prevents 100% foreign direct investment (FDI) in multi-brand retail made that impossible, analysts at Forrester Research had said in a note earlier. India allows 100% FDI in cash and carry wholesale ventures but restrict FDI in multi-brand retail at 51%.
To get access to the retail market, Walmart acquired Flipkart in a $16-billion deal last year. According to analysts at RedSeer, an estimated 65 million users on an average adopted internet every year from 2016 onwards. With close to 530 million internet users, India has the world’s second-largest internet user base.
Recently, e-commerce firms have come under government scanner due to violation of foreign direct investment (FDI) norms. The government’s revised FDI norms bar e-commerce firms having foreign investment like Flipkart and Amazon from selling products of the entities in which they hold stake or whose inventory they control.
The government is also in the process of formulating an e-commerce policy that proposes regulating cross-border data flows, setting up storage facilities locally and establishing a data authority to devise a framework for sharing data.
Separately, wholesale unit Flipkart India’s losses increased by 86% to Rs 3,835.3 crore in FY19 compared to the year-ago period, the company’s RoC filings showed.