Flipkart looks to doube its seller count by March

Flipkart posted a loss of about Rs 2,000 crores in the year ended March. The country’s largest online retailer spent heavily to fund discounts to win customers and stay ahead of rivals Snapdeal and Amazon India while investing in back-end operations. Experts feel India’s leading online marketplace may need to keep sustaining losses as it seeks to win market share by offering the best prices.

The company expects sales to surge six-fold this year. It is on course to sell goods worth Rs 65,000 crores in fiscal 2016. Flipkart is also looking to double its seller count by March from 60,000 now in an effort to convert itself into a pure marketplace similar to rival Snapdeal. At the same time, the company has been hiring aggressively as reflected in employee benefit expenses that rose threefold to Rs 476 crores.

Indian Internet companies will likely need to chart a longer and more tortuous path to profitability than some of their Chinese counterparts, and will likely see much greater consolidation for scale and better pricing power. India’s e-commerce companies are probably getting more circumspect with discounts as they seek to shore up their balance sheets.

Flipkart on its part could post between 35 to 50 per cent of its sales as operating loss due to its high logistics cost and discounting.