Why E-commerce companies in India are bleeding? Here is the analysis
29th, October 2018 - Startup
Indian Ecommerce companies are performing better when it compared to their revenue, but the bottle line is shaking as the net loss is increasing at rapid ration.
Flipkart in its recent filling reported 750% increase in loses to Rs 2064 crore for FY18 compared to Rs 240 crore for FY17.Flipkart, now part of global giant Wal-Mart Inc. made a significant jump in its revenue to Rs 21600 crore in Fy18 as per the source.
Paytm’s loses increased 150 times to Rs 1800 crore as against its revenue rose to Rs 775 crore.
Amazon India’s loses increased four times and expenses rise 26% though it posted a 27% revenue growth for FY18 at Rs 7149 Crore.
Ecommerce companies are spending huge chunk of the cash on Warehouse development, logistics, acquisitions, and high discount to lure customers.
As per the expert’s opinion “Most companies are relying heavily on consumer durables and electronics, as these are fast moving consumer goods and it requires different types of infrastructure and logistics systems..”
Many Ecommerce companies are not able to touch the profitable position is due lack of understanding the market and customer sentiment. They focus on giving high discount and classy advertisement campaign to attract the customer which eventually ends up in the high cash burn from the account.
Revenue of the Ecommerce companies are increasing but the bottom line is bleeding. We need to wait and watch the Ecommerce race in the market to identify who win and lose the race in terms of Bleeding.
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