Flipkart burns half of $6.1 Bn raised from SoftBank, Tencent, Tiger Global

In a tug of war between Amazon and Flipkart, the latter, supported by various reports, claims to be the market leader in e-commerce space in India.

Flipkart, apparently, has more than 50 per cent of the e-commerce market share alone. And another half is distributed among online platforms such as Amazon, Paytm Mall, Snapdeal, and several others.

However, to maintain the pole position, the Indian e-commerce major has borne accumulated losses of nearly Rs 24,000 ($3.6 billion) as of March 2017, according to its filings in Singapore, said a BloomberQuint report.

The loss reportedly widened 1.4 times from nearly Rs 10,000 crore a year ago.

So far, the total loss incurred by the company is equivalent to half of the $6.1 billion it raked in from investors since inception 11 years ago.

The overall losses increased by 68 per cent in FY17 to Rs 8,771.4 crore as compared to the previous fiscal. The losses soared after the company raised capital led by Chinese Internet conglomerate Tencent at a much lower valuation of $11.6 billion in April 2017.

The fall in valuation raised the borrowing cost of the company to Rs 4,308 crore. The fair value loss on derivative financial instruments stood at Rs 3,412 crore in FY17.

During the year, Flipkart managed to push upward sales by only 29 per cent. On an average, it sold goods worth Rs 54.4 crore every day in the 12 months through March 2017 compared with Rs 42.20 crore in the previous year.

The overall revenue of the platform grew to Rs 19,855 crore. Interestingly, in FY16, it had witnessed 50 per cent revenue growth from a year earlier.

Seven months ago, Flipkart raised a massive sum of $2.5 billion from Softbank. Currently, it's also negotiating a gigantic funding deal with Walmart.

The inflow of funds, however, has put a new lease of life into the company and it has once again charged up to go berserk on the Indian e-commerce market with discounts and freebies.

The recent report claimed it has captured 35 per cent market share in the online fashion segment and achieved $1 billion actual sales (not GMV) in FY18. Besides, it claimed to have over 75-80 per cent market share in the online fashion space through its affiliates – Myntra and Jabong.

Meanwhile, in an effort to give a push to online sales, another online retailer, Amazon, is pumping massive investment into the ecosystem. It has outrun its rival Flipkart in terms of total investments in India.

It has nearly doubled its authorized capital to $4.74 billion in the Indian arm of its marketplace. It had committed to invest $5 billion in the Indian market in June 2016.