Flipkart

Startup leaders choose to go to office first before asking others to come

To instill confidence among workforces about health safety, team leaders and managers of India’s top startups including Flipkart, Paytm, Udaan and Zomato, have decided to go at work first before asking colleagues to come. many firms still have asked their employees to continue work from home for those functions which may not need at-work presence.

Despite the government’s recommendation to resume operations, many firms still have asked their employees to continue work from home for those functions which may not need at-work presence.

Paytm is Noida based firm and has recommenced with only 25% workforce whereas guidelines permit 33%. Its spokesperson said, “…depending on where the offices are situated wherever possible our senior leadership has taken the decision of coming to the office first, to instil confidence in our workforce that all necessary steps are being taken to safeguard employees.”

E-commerce giants like Flipkart, Udaan and Zomato have applied such similar approaches for their employees.

Udaan is headquartered in Bengaluru and it is basically a B2B e-commerce firm. Its co-founder, Sujeet Kumar said, “We encourage employees to apply their own judgement on when and how they would like to return to the office…A significant number of employees resumed work over the last couple of weeks.”

There are several concerns for employees about returning to work like

• Travel restrictions.
• Fear to risk the health of their family especially in cases of aged parents and young children.
• Some of them have moved to their hometown and are unable to come back.

An employee of Delhi-based on retailer said, “The fear is not just about the workplace but also getting to work, and other factors at play.” However, firms are understanding these concerns.

For instance, Udaan and joined hand with Zoomcar and Bounce to sanitized vehicles for employees who do not own personal transport. Ola too have addressed the employees about safety measures like sanitising workspaces six times a day, safety teams for every site and demarcated seating to enable social distancing.

The Chief Human Resource Officer of Ola, Rohit Munjal, has asked all the leaders and managers to call their team members to the office only if it is absolutely needed. He said, “Unless your work requires you to be at the workplace by the nature of it, you will continue to work from home until the end of June.”

In fact, Snapdeal has extended its work from home advisory till 14th June and hope for a smaller number of employees back in the office after 14th June. Its spokesperson said that the first phase would include those volunteering to return to the office and those who need to be in office for specific work requirements.

Chief HR officers of these firms have indicated that businesses would move closer to regular operations especially in Delhi and Bangalore at the beginning of the month July while exceptions have been made for the month of June.

HR executive of an e-commerce firm based in Bengaluru said, “As businesses open up next month onwards, stricter protocols will be in place. There will also be enough data and learnings from the last three months to come to the best conclusion.”

Other firms like Swiggy, Amazon, Facebook have extended work from home for all their employees for at least the month of June.

After tie up with Spencer, Flipkart joins hand with Vishal Mega Mart amid Coronavirus

Flipkart, India’s leading e-commerce marketplace, aims to boost its scope of offerings in the pandemic situation. Hence, this is the second such partnership of it.

In India, e-commerce companies have resumed their operations including the delivery of non-essentials. So, in order to pave way for home delivery of essentials in fastest and safest mode amid coronavirus crisis, Walmart-owned Flipkart on May 19, 2020, announced its partnership with an offline retail store chain Vishal Mega Mart in 26 cities in the country including Delhi-NCR, Bangalore, Hyderabad and Kolkata. Further, it will be scaled to over 240 cities in upcoming weeks.

Flipkart, India’s leading e-commerce marketplace, aims to boost its scope of offerings in the pandemic situation. Hence, this is the second such partnership of it. Earlier, Flipkart has tied up with retail store company, Spencer Retail on April 9, 2020.

According to the press release, consumers can order essentials from more than 365 Vishal Mega Mart stores and that will be delivered by Flipkart at consumers’ doorstep. Delivery will be done as per the government’s guidelines i.e. service will be available across all zone except containment zones.

As part of this partnership, Flipkart has created a ‘Vishal Mega Mart Essentials’ store its app so that consumers can order a wide assortment of essentials like flour, rice, oil, pulses, beverages and other items from various brands as well as Vishal’s own brands.

On the tie-up, Kalyan Krishnamurthy, CEO of Flipkart Group, commented “Flipkart, as a committed corporate citizen, is constantly innovating to help fulfil consumers’ needs in these unprecedented times. Our teams are working relentlessly to understand the requirements of each region and forging strategic tie-ups to meet the same.”

He also added, “As part of this, our ability to work with the modern retail stores across cities will give consumers access to relevant products while enabling doorstep delivery of groceries and essentials. Backed by our robust technology platform, this will help consumers to have the real-time visibility of essentials available in their area and while also helping with timely doorstep deliveries.”

On this initiative, Gunender Kapur, CEO and MD of Vishal Mega Mart, commented, “In these difficult times, we are ensuring that we reach our customers with essentials through all possible channels. We are excited about working with Flipkart, now our customers can visit our 365+ stores or order essentials from Vishal easily on Flipkart and have them delivered at their doorstep, in a safe and hygienic manner.”

Sachin Bansal, Flipkart Co-founder appointed as Managing Director of Venture Navi Technologies

Sachin Bansal has made several investments into companies and start-ups such as Altico Capital, U Gro Capital, IndoStar Capital, Vogo, Bounce, KrazyBee, Ola, Bansal attended Indian Institute of Technology Delhi and completed a degree in Computer Engineering in 2005. After graduation, Bansal worked at Techspan for a few months and later in 2006 he joined Amazon Web Services as a Senior Software Engineer.

Sachin Bansal has been appointed as the Managing Director of his second Bengaluru-based Fintech venture– Navi Technologies earlier known as BACQ. He recently led an over Rs 3,000 crore round in his new venture. He co-founded Navi Technologies with Ankit Agarwal. Navi Technologies had earlier acquired a majority stake in Chaitanya Rural Intermediation Development Services (CRIDS) that is into the micro-finance space.

His giant size investment in the FinTech sector is an indication of an upcoming revolution in this specific industry. It includes investments into companies such as Altico Capital, U Gro Capital, IndoStar Capital, and the acquisition of mutual fund business of Essel Group.

Many of the high net-worth individuals and venture funds have invested in Navi Technologies. Recently, Gaja Capital had invested Rs 204 crore.

Sachin Bansal is most known as the co-founder of the e-commerce giant, Flipkart. However, in the year 2018, when Walmart acquired Flipkart, Bansal exited the company. Moreover, since the year 2014, Sachin Bansal has invested in 18 startups with teh deal size being 1-2 million dollars. In fact, in the year 2019, he invested 100 million dollars in Ola cabs wherein he received a stake of 0.37%.

As on february 2019, Sachin Bansal has already had investments in Unacademy, TeamIndus, Ola, Grey Orange, In Shorts, SigTuple, and Ather Energy.

Gaja Capital invests Rs 204 crore in Navi Technologies

Navi Technologies has made allotments of 1.45 crore equity shares, at a price of ₹140.5 per share. Three entities belonging to Gaja Capital, including Gaja Capital Fund-II, GCFII-B and Gaja Capital India AIF Trust have received the allotments. The latest private placement follows a fundraising of over Rs 3,000 crore by the company, led by Bansal and other investors earlier this month.

Sachin Bansal’s financial services startup Navi Technologies has raised ₹204 crore in fresh equity capital from Mumbai-based private equity firm Gaja Capital and other ultra-rich individual investors.

Co-Founder of Flipkart, Bansal is now also the managing director of Navi Technologies. Bansal has already invested over half of his wealth from Flipkart’s exit on Navi.

Bengaluru-based Navi Technologies has made allotments of 1.45 crore equity shares, at a price of ₹140.5 per share. Three entities belonging to Gaja Capital, including Gaja Capital Fund-II, GCFII-B and Gaja Capital India AIF Trust have received the allotments.

The latest private placement follows a fundraising of over Rs 3,000 crore by the company, led by Bansal and other investors earlier this month. It is, however, unclear if Gaja Capital’s investment is part of the same preferential allotment.

The firm Navi Technologies is not yet disclosing much about its future expansion plans rather than explaining their services. They are highly focussed on making financial services more simple, affordable and feasible for customers. Their website also gives the space and invite people to join in for their initiative.

Gaja Capital, promoted by Gopal Jain, has bets in Chumbak, Avendus Capital and Carnation, among others. The investment in Navi is part of a larger round, mostly subscribed by promoter Bansal.

Bansal has completed his education from well know IIT Delhi. Kickstarted his professional career early. He was previously working with Amazon web services and then joined Flipkart. Gradually became the CEO at Flipkart, he worked there for a total span of more than 10 years.

Flipkart and Amazon prepare for sales in May, Soon After Lockdown

Flipkart and Amazon have asked their partnered brands and sellers to stock up for the post lockdown sales. They are expecting that many people are waiting to buy non-essential goods post lockdown. The demand for these non-essential goods is immensely high at the moment.

To cope up with the economic loss during the nationwide COVID-19 lockdown, Flipkart and Amazon have decided to put up mega online sales in May.

To avail the maximum benefit and recover from the loss of lockdown, they are planning to reduce the discounts.

Brands now know that, after the quarantine, customers will be looking for the availability of products rather than discounts. The new sales will not be based on cuts rather than they will be based on high demand.

Due to the Coronavirus pandemic, people are shifting to online platforms for buying groceries and other things. Therefore, a significant boost in E-commerce growth is expected.

Avneet Singh, chief executive of SPPL, which makes Kodak and Thomson smart televisions, said that e-commerce marketplaces have witnessed new consumers in the age group of mid-thirties are ordering products online for the first time. Singh believes that these new consumers will help boost online sales after the restrictions are lifted.

So far, Odisha is the state to allow all e-commerce platforms, such as Flipkart, Amazon, BigBasket, Grofers, Swiggy and Zomato, along with their third-party logistics partners, to resume operations during the second phase of the lockdown. Learning from Odisha, other states and central authorities are expected to take similar actions.

Flipkart co-founder Sachin Bansal invests INR 650 crores in Ola

Sachin Bansal, who left Flipkart in 2018 invested INR 650 crores ($92 million) in Bengaluru based ride-hailing company ‘Ola’ which turns out as the largest investment made by an individual in the fundraising.

“Ola is one of the India’s most promising consumer business, that is creating deep impact and lasting value for the ecosystem,” said Sachin Bansal.

The investment comes as a part of Ola’s series J funding round under which it is planning to raise $1 Billion (Approximately 7150 cr).

Walmart acquired 77% stake in Flipkart for $16 Billion in 2018.

I'm super excited to welcome @_sachinbansal onboard as an investor in @Olacabs. Sachin is an icon and an inspiration to a whole generation of entrepreneurs. I look forward to learning from him as we build one of the most impactful businesses out of India! pic.twitter.com/SGIaJrXirA

— Bhavish Aggarwal (@bhash) February 19, 2019

In October 2017, Ola had announced raising $1.1 Billion funding from China’s Tencent Holding and Softbank Group.

Ola was found in 2011 by Bhavish Aggarwal and Ankit Bhati.

It is claimed to be one of the world’s largest ride-hailing companies having users in more than 125 cities with over a million drivers on its platform.

Flipkart was founded by Sachin Bansal and Binny Bansal in the year 2007. “Sachin is an icon and an inspiration to a whole generation of entrepreneurs” stated Bhavish Aggarwal.

Binny Bansal may log out from Flipkart following Walmart’s log in

Binny Bansal is looking to sell his stake and exit the company following Walmart-Flipkart deal.

One of the co-founders of India’s largest e-commerce firm Flipkart, Binny Bansal is looking to sell his stake and exit the company following Walmart-Flipkart deal.

Sachin Bansal and Binny Bansal are both planning to sell their stake once the deal goes through, but Sachin is still interested in hanging around in the firm they founded 11 years ago, said a Factor Daily report quoting independent sources.

At present, Bansals reportedly claim to own 5.5 percent each in Flipkart. The upcoming Walmart investment is likely to value the online marketplace to the tune of $20 billion. Hence, both Bansals will make $1.10 billion (or Rs 7344 crore) each.

Walmart, as per the latest report, is likely to acquire 51 percent stake, paying anything between $8 billion (Rs 53,450 crore) and $12 billion (Rs 80,180 crore), in Flipkart as early as next week.

The US retail giant has been in talks with Flipkart for months to acquire a controlling stake in the firm as it looks to take on rival Amazon.com Inc head-on in India, a market where e-commerce is tipped to grow to $200 billion in an upcoming decade.

Two another sources added that some of these things can change at the last moment as nothing is final. But Binny exit seems more likely.

Current shareholding structure of Flipkart

SoftBank which owns one-fifth of the Bengaluru-based marketplace had appeared as a major hurdle in the deal. However, the Japanese tech titan has given a green signal to it and slated to bag $4 billion exits.

Earlier, in August last year, Flipkart had closed the deal with SoftBank, which bought the stake worth at least $2.6 billion. Post pouring in a massive round, SoftBank owns about 21 percent of the firm.

The New York-based Tiger Global, one of the major backers of Flipkart, witnessed its shareholding reduced from 33.6 percent to 20.5 percent as it sold out 13 percent stake to SoftBank in the secondary purchase.

The Japanese conglomerate invested roughly $1.4 billion directly in the e-commerce company.

Meanwhile, Binny Bansal shareholding fell from 7.6 percent to 5.2 percent, when he sold shares worth $30-35 million in the secondary buyback led by SoftBank last year.

Sachin and Binny investments in startups

Besides building and scaling Flipkart, both founders also have backed many startups in personal capacities.

So far, Sachin has invested in seven ventures including Inshorts, Ather Energy, Unacademy, and SpoonJoy (not operational) with a total funding of $26 million, while Binny Bansal has invested about $32 million across 17 companies.

Apart from co-investing with Sachin, Binny also wrote cheques for fashion portal Roposo and gaming company MadRatGames.

Bansals in December, have incorporated Sabin Advisors, a new company, which could include venture capital funding and insurance.

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

The overall losses increased by 68 percent in FY17 to Rs 8,771.4 crore as compared to the previous fiscal

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 percent 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 percent 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 percent. 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 percent 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 percent 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 percent 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.

Flipkart CFO Sanjay Baweja quits the company

Baweja, who was earlier an employee of Tata Communications joined Flipkart as the Chief Financial Officer two years back, has resigned from the job.

Sanjay Baweja, who was earlier an employee of Tata Communications joined Flipkart as the Chief Financial Officer two years back, has resigned from the job. This news comes as a shock as according to reports Flipkart is in advanced level talks to raise$ 1 billion from the global retailer Wal-Mart and because it is the festive period where e-commerce sales almost treble.

Flipkart which is currently engaged in a neck to neck battle with Amazon.in has witnessed the resignation of three very important employees before Baweja announced his exit. Flipkart’s commerce head Mukesh Bansal and chief business officer Ankit Nagori also left the company in February this year, to start their entrepreneurial venture followed by the chief product officer Punit Soni, quit in April this year after an year-long stint.

Here are a few estimated reasons as to why Baweja might have quit:

1. Unable to raise funds

The e-commerce giant was unable garner the required amount of funds and the company’s future was depending upon the deal with Wal-Mart. However, that deal fell through which might have caused the owners to take a decision to ask Baweja to quit.

2. PwC audit report

Rumours stated that that following the Pricewaterhouse-Coopers forensic report, Baweja was asked to quit the company. An internal audit report prepared by PwC on the directions by Jabong’s German investor, Rocket Internet, in July revealed several corporate governance violations by some of the top ex-senior managers of Jabong.

Jabong was acquired by Flipkart in 2016.

3. Persistent losses

It was believed that Baweja was asked to join the company when Flipkart wanted to cut losses, however, amongst growing competition, this didn’t work out well for Flipkart.

Flipkart launches Fliptech and Hobby Hub to help customers make more informed purchases

To stay ahead in the e-commerce game and in order to ramp up its services, Flipkart has today launched a curated product guide called Fliptech, to help its customers make informed purchases.

This outlines content across the categories of Electronics, Fashion, Mobiles and Home.

Fliptech is a complete gadget guide covering latest launches from cameras to laptops. With this feature, customers can check all the recommendations for a product and see the best buy for the day. With this latest addition, Flipkart’s objective is to help customers discover relevant products and decode high-value purchases and also encourage adoption of online commerce.

Additionally, in an attempt to familiarise and engage with customers across various products of interest, Flipkart introduced ‘Hobby Hub’. It will help customers learn more about their interests, likes and hobbies and will direct them to make purchases based on their preferences.

The customer-friendly Hobby Hub allows customers to deep-dive into a hobby of their choice. Showcasing the different facets of each hobby (eg: photography broken down into wildlife, food, people and nature), Hobby Hub simplifies purchases based on one’s hobby and directs them to the best deals on the must-have products.

Adarsh Menon – VP, Electronics and Auto said, “Studying the customer-buying patterns, we observed that more than 50 percent buyers believe in background research before finalising on a product, and this trend is across all categories. With these two new features, Flipkart aims to offer an end-to-end shopping experience right from discovering content to check-out.”

Fliptech and Hobby Hub is currently operational and can be located under the store section on Android and iOS across app and website.

There have been quite a number of changes at Flipkart after Binny Bansal took over as CEO. The e-commerce business, which heavily relies on discounting and luring customers, strengthened its logistics business and had also said that if its other categories did not turn profitable, they will be shut down in the next six months. Recently, it shut down Ping, a social commerce feature that allowed users to interact in real time and decide better. Notably, it had also shut down Nearbuy, its groceries delivery app after piloting it for six months.

Its payment gateway PayZippy, which was launched in July 2013, shut down in August 2014. Flipkart also stopped the sale of its e-books in December 2015.

The e-commerce pioneer, after facing a series of markdowns,, recently received a mark-up from Fidelity Rutland Square Trust II, a mutual fund investor in Flipkart. On the other hand, the firm again faced a markdown from T Rowe Price and now stands at a valuation of around $10 billion.

This article was originally published in YourStory

Success story of Sachin Bansal: The entrepreneur who almost shut down Flipkart

We’ve all known Flipkart to be a successful e-commerce giant. However, the founder of Flipkart, Sachin Bansal didn’t have it easy at all points.

We’ve all known Flipkart to be a successful e-commerce giant. However, the founder of Flipkart, Sachin Bansal didn’t have it easy at all points. His journey of building Flipkart into a successful venture was also etched with enough trials and tribulations which almost made him rethink his business plan. He almost lost faith in his idea and was close to shutting it down.

The Reason

The e-commerce site, Flipkart, faced a sharp dip when the company’s assets were evaluated. In TIE-Delhi-NCR, the confident yet unfazed 34-year old was quite disturbed by the valuation of his start-up by organ and Stanley and claimed that that Flipkart existed in theory and didn’t really have much transaction backing it up. In February ’16, Flipkart estimated its total value to be $15.2 billion. However, Morgan marked down at the stake of the company to a $109.37/share which was an all time low at the fund-raiser.

Bansal was unaffected by the move and still believed in execution despite all odds. He also claimed, “There is no doubt in my mind that in three years, we will cross all projections.”

Currently Flipkart was valued at $15 billion after it raised over $700 million from prestigious investors like Tiger Global Management.

How 2012 Looked For Flipkart

2012 wasn’t a very good year for Flipkart as the e-commerce site had to avail a ‘down round’ of funding.
The founder, Sachin Bansal stated: “The delay in raising money on hopes of better valuations was a wrong business call. It was the toughest time for us. We were hoping that if we delay raising funds that was available, we’d be able to get a better valuation. However, Flipkart had to raise funds at valuations of $750 million compared to $1 billion in the round before it.”

The company didn’t show any records of growth till the end of the year. However, with the reputation of the company at stake, Sachin Bansal took it upon himself to go back to the board and regroup. He had ideas about reducing cost and wanted to figure out more ways to make the company more appealing to consumers.

The Next Step

For any other company, the obvious decision would have been to take a giant step and go public. But, even under continuous speculation. Bansal decided that they’d not go public. H claimed that going public would mean tapping into more public domains which wasn’t really a requirement at that moment. Instead, he believed in the growing market and discarded the idea of raising funds altogether. He also made this decision as he believed that the depth and expansion in the private market currently should be taken advantage of instead of going public completely.
He also claimed that someday they’d need to go public but that wasn’t the correct time for venturing into the public market.

Lessons start-ups could learn from Bansal and his e-commerce venture Flipkart:

1. Tap funds when they’re readily available

The statement “Funds are absolutely essential for a start-up” isn’t foreign to any entrepreneur. Bansal also advises the budding entrepreneurs to raise funds for their business when they’re readily available rather than when they are necessary because that situation isn’t a very desirable one.

This advice was based on a decision taken in 2012 when the company was going through a ‘down round’ of funding phase. He claims that this point is a make or break point for a start-up.

2. Focus when things are going good

Bansal follows the mantra ‘Customer is the king’.

He also advices the budding entrepreneurs to focus on things when the business is good and not when things are going awry. From his standpoint, quality of business and capital issues faced by the business are the two things every entrepreneur should focus on. He also advices that improvement is a gradual process which should take place even when things are going good.

Bansal: “As entrepreneurs we don’t get emotionally attached to solutions; we get emotionally attached to the problem.”

3. The major focus areas

He believes that focus points for a start-up company should be the market conditions and building team strength. Business plan undergo numerous changes so a constant focus on the market opportunities and tapping them in time is crucial.

4. Boundaries are necessary

It may occur to a creative entrepreneur that boundaries are not necessary. But, having certain constraints and don’ts can actually save a start-up from making mistakes.

5. Take criticism with a pinch of salt

Flipkart has faced numerous issues on Big Billion day2014, because it servers shut down and refused to operate properly. However the company came out of that situation and took certain steps to improve in the future.
Also, feedback and criticism garnered from passionate people in the same field is always a good thing as it gives you a chance become better in the future.

6. Always look out for the greater picture

It sounds repetitive but it is tough to adopt in a business model and at certain points, you’re bound to encounter failure. However, at those points, focus on the positives and the big picture (the sole reason why you started the company) and strive to become better.

7. Keep tabs of your competitors

Keeping tabs of your competitors is necessary as it could teach you about a lot of things you might be doing wrong in your venture. Bansal shops on every other e-commerce site and sends mails to his team regarding areas they could actually improve upon. This is entrepreneurship at its best!

8. Your personal and professional life are different

The life of an entrepreneur can be tough. In the professional space, he has to deal with investors, meetings, decisions and criticism. But once of that space, Bansal is the perfect family man. He has a doting six-year old son and he loves spending time with his son. Separating personal and professional life can have positive effects on your health as well.

Bansal has successfully earned the title of a successful entrepreneurship and deserves every bit of it. If his lessons are kept in mind, every entrepreneur will receive massive help from a man who almost shut down a billion dollar company.

Valuation of Flipkart slashed by two more investors

There is a growing sense of uneasiness within the Flipkart investors as they realize India’s top e-commerce firm to be overvalued. It is still to be seen by how much margin.

American mutual funds Fidelity Rutland Square Trust II and Valic Co. have joined US asset management firm T. Rowe Price and Morgan Stanley in reducing the value of their investments in Flipkart.

According to filings with the Securities and Exchange Commission, the mutual fund managed by Fidelity Investments lowered the value of Flipkart shares it owns by almost 40% to $82 apiece as of 29 February 2016 from $135.8 in August last year. Valic marked down the value of its investment in Flipkart by 29% to $98.19 a share from $139 apiece.

In February, global brokerage firm Morgan Stanley had marked down its stake in the Indian e-commerce behemoth Flipkart by 27 percent. The mutual fund, called the Institutional Fund Trust Mid Cap Growth Portfolio, marked its stake in Flipkart at $103.97 per share.

T. Rowe Price slashed the holding value of its investment in Flipkart by 15.1% in its report for the quarter through March 2016.

None of the four firms have given a rationale for the valuation. Lowering valuation of Flipkart hasn’t come as a shocker to industry observers. Market observers have been anticipating correction in valuation of privately held Internet companies.

The markdowns come at a time when Flipkart is reportedly trying to raise more funds amid an intense battle with SoftBank-backed Snapdeal and the local arm of Amazon.com Inc to maintain its supremacy in the Indian e-commerce market.

After that funding galore in the initial years, things in the investment domain have started to slow down from past few years — specially Q4’15. Investors are now looking for a sustainable business model and profitability rather than just initial disruption through technology.

Flipkart also counts Tiger Global Management, Naspers, Accel Partners, Iconiq Capital, GIC, DST Global and Sofina Societe, among others, as investors.

Few financial experts opine that investors in Flipkart, Snapdeal and others would look to exit from these companies in the course of next two to three years.

Amazon pips Snapdeal to become India’s 2nd largest online marketplace after Flipkart

Amazon was India’s second-largest online marketplace by shipments last month, industry estimates show, as it dislodged Snapdeal to become the only major player to increase share from a year ago.

Market leader Flipkart’s share of shipments fell to 37% in March from 43% in the same month in 2015, and Snapdeal’s fell to 14-15% from 19%, show estimates by an investor tracking the logistics market and the chief executive officer of a logistics company that handles shipments for online retailers. Amazon India’s unit market share surged to an estimated 21-24% from 14%. Although the data are snapshots of shipments a year apart, they definitely point to a drop in the volume market share for the India-based companies. Other industry experts and analysts corroborated the numbers.

Also read: Indian e-commerce war: Flipkart’s Sachin Bansal & Snapdeal’s Kunal Bahl involved in Twitter spat

They said the data were evidence of the larger unit market share trend in India’s ecommerce industry, although at least one recent estimate pegs Flipkart and Snapdeal ahead of Amazon India by sales. “Amazon is very rapidly taking market share from companies like Snapdeal and other smaller players.

If there is no new entry, it will be a two-horse race (between Flipkart and Amazon) by the end of the year,” said Satish Meena, a senior analyst with Forrester Research. “If Flipkart is not able to get its act together in the next 6-12 months, Amazon can overtake Flipkart also.”

Morgan Stanley estimates that India’s online retail market, including delivery of food and grocery, will be worth $119 billion by 2020 from $16 billion in 2015. Flipkart said in June 2015 that it was aiming to sell goods worth up to $12 billion in a year; Snapdeal had claimed it would do better than Flipkart; and Amazon has not disclosed a sales target.

Also read: Top 10 Indian Startups and how they took off

If Amazon is gaining market share, it will be another instance of a multinational internet company showing signs that it can become the dominant player in India. In the ride-hailing business, San Francisco-based Uber says it is catching up fast with market leader Ola, which in turn contests the claim. Online retailers shipped 8-9 lakh products a day in March this year, with Flipkart, Amazon and Snapdeal accounting for about three-fourths of the shipments, the estimates show. ShopClues and Paytm rank next.

Flipkart, Amazon and Snapdeal did not reply to specific queries from ET on their shipments, market share and average order values. The gains by Seattle-based Amazon, which launched in India a little less than three years ago, follow aggressive investing in its local unit — CEO Jeff Bezos has so far committed to pump in at least $2 billion in India. Flipkart and Snapdeal, meanwhile, are forced to trim expenses and wean customers away from heavy discounts as they struggle to raise money from investors at present valuations.

A new element has been introduced to the equation by the government’s ‘guidelines’ earlier this month on ecommerce marketplaces.

Also read: 11 Times when Indian startup wars got very real

One of the main requirements is that no seller can account for more than a quarter of sales on a marketplace, and this could affect each company differently – Amazon and Flipkart have greater reliance on large sellers but not Snapdeal. Amazon has infused at least Rs 6,700 crore since January 2015 into its India unit, Amazon Seller Services, with over half of that amount being invested since December.

The company has channeled a lot of that money into improving the shopping experience for customers in terms of delivery and aftersales service, say investors and analysts. Amazon is also expected to introduce its successful Prime subscription programme in India.

“In 2015, we grew by more than 250% over 2014,” a spokeswoman for Amazon India said in an email. “We are on a momentum to deliver similar levels of growth this year but on a much larger base.”

In terms of gross merchandise value, though, Morgan Stanley in a February report estimated Flipkart’s market share at 45%, Snapdeal’s at 26%, and Amazon India’s at 12%. The GMV metric reflects the total value of all the goods sold on a platform but does not factor in discounts or reflect the actual commissions digital marketplaces earn on those sales.

Even with those estimates, entrepreneurs and investors say this year will mark a heightening of rivalry between Amazon India and Flipkart. Snapdeal is increasingly betting on diversification to try to monetise its existing users by entering into or partnering with other firms to offer services such as payments, travel bookings and food and grocery delivery that could bring repeat transactions. “We already have more than 1 million users transacting across our platforms daily, which is more than Flipkart and Amazon put together,” said a spokesperson for Snapdeal.

Also read: How Sachin Bansal started: Life of Flipkart founder

The battle between Flipkart and Amazon has primarily been in electronics, including smartphones, but the action is likely to shift to fashion where the former has made significant headway with Myntra that it acquired in 2014. Electronics accounts for a large portion of shipments but fetch commissions of 2-7% whereas gross margins in fashion can top 45-50%, according to Morgan Stanley.

“We have clear leadership of the online market in India with over 60% market share in three of the largest segments — smartphones, fashion and electronics,” said a Flipkart spokeswoman. “Our focus will be to consolidate this leadership position by continuing to build world-class customer experience, innovate retail in India and build a technology powerhouse out of India.”

Flipkart, under new CEO Binny Bansal, is pulling resources urgently to improve customer experience. Saikiran Krishnamurthy, who heads the service product group including after-sales services, was in March given additional charge of Ekart, Flipkart’s logistics unit, to improve customer experience by making the two divisions work together.

“Flipkart has to win back customers’ trust that they had till two years ago,” said Meena of Forrester Research.

Flipkart had targeted GMV of $10-12 billion for 2015-16. The company did not say if it met the target.

This article was originally published in The Times Of India

Image credit: www.indiatvnews.com

[Infographics] How Sachin Bansal started: Life of Flipkart founder

The story of how the two men started with just two laptops and grew to its current size is inspirational. At the time of raising $1-billion last year, the Bansals’ combined stake of around 15 per cent in Flipkart was valued at Rs 6,000 crore (Rs 60 billion).

Sachin Bansal – The master mind behind the Flipkart idea, one of the first people to establish an e-commerce website in India, an IIT graduate and a business man who created something of a history in the great Indian internet shopping revolution.

At the time of raising $1-billion last year, the Bansals’ combined stake of around 15 per cent in Flipkart was valued at Rs 6,000 crore (Rs 60 billion).

The story of how the two men started with just two laptops and grew to its current size is inspirational.

They were not only able to ride India’s robust consumption story, but also earned the investors’ willingness to place their bets on their company.

Image credit: www.forbes.com

Indian e-commerce war: Flipkart’s Sachin Bansal & Snapdeal’s Kunal Bahl involved in Twitter spat

The ongoing e-commerce war spilled over to Twitter on Friday, when Sachin Bansal, co-founder of India’s largest online retailer Flipkart, made a direct jibe at competitors – Snapdeal and Paytm.

The ongoing e-commerce war spilled over to Twitter on Friday, when Sachin Bansal, co-founder of India’s largest online retailer Flipkart, made a direct jibe at competitors – Snapdeal and Paytm. Bansal tweeted, “Alibaba deciding to start operations directly shows how badly their India investments have done so far.” Recently, Chinese e-commerce giant Alibaba, which has stakes in Snapdeal and Paytm, expressed interest in entering India directly this year.

Alibaba deciding to start operations directly shows how badly their Indian investments have done so far

— Sachin Bansal (@_sachinbansal) March 25, 2016

Snapdeal’s co-founder Kunal Bahl was quick to respond to his arch-rival’s tweet, saying, “Didn’t Morgan Stanley just flush $5 billion worth market cap in Flipkart down the…”, accompanied by a toilet emoticon. “Focus on your business, not commentary,” Bahl tweeted. His comment come on the back of Wall Street powerhouse Morgan Stanley recently marked down Flipkart shares by 27%, bringing down the country’s most valuable privately held tech firm’s its valuation to around $11 billion from $15.2 billion.

Didn’t Morgan Stanley just flush 5bn worth market cap in Flipkart down the ?? Focus on ur business not commentary 🙂 https://t.co/8NpkhWWo2j

— Kunal Bahl (@1kunalbahl) March 25, 2016

This is not the first time Bahl and Bansal have locked horns publicly. Last year, Bahl had said in an interview that he will top Flipkart’s gross merchandise value or GMV by the end of 2015. Flipkart responded immediately through another interview, indicating it will remain the number one player in the Indian e-commerce market.

Alibaba holds around 5% stake in Snapdeal and nearly 40% – directly and via its arm Ant Financial – in online payments major and e-tailer Paytm.

The Indian online retail market is seeing a hotly contested battle being fought among the domestic players like Flipkart, Snapdeal, Paytm and the Jeff Bezos-led Amazon. “This shows that none of the existing e-commerce players show leadership of the market. That’s what makes it such an easy decision for Alibaba to enter. Almost $7 billion of investment has gone and yet there’s no winner in sight. So it’s not just a reflection on Snapdeal and Paytm but the whole sector,” an investor in multiple consumer internet companies said.

Indian e-commerce companies have so far been burning millions of dollars in cash on discounting, logistics and marketing to get to a substantial scale. These subsidies have been financed by investors who have ploughed more than $3 billion and $1.5 billion in Flipkart and Snapdeal, respectively. But with the overall funding environment tightening globally and in India, from here on it won’t be easy for these players to rack up financing and consolidation in the market looks imminent.

This article was originally published in Times of India