Indian e-commerce giant Flipkart has reportedly burnt $3 Billion in the last 10 years. This is half of what it has raised ($6.1 Billion) from its investors in the last 10 years. The company aims to become ‘profitable’ by 2018 Fiscal year. Many believe that Flipkart’s battle with Amazon India, will only force the company to burn more cash, and it is highly unlikely that it would become profitable even in 2020.
Though the company’s GMV (Gross Merchandise Value) has been rising exponentially in the last 4-5 years, the company failed to become profitable. Backing its cash-burning strategy, the company said, ‘if we want to become profitable, we can right away become profitable. Making profits is not our intention right now. We want Flipkart to expand globally, and become a global player’.
Many criticized Flipkart’s strategies of ‘burning cash’, stating ‘a company is established to earn money. If a company cannot become profitable after a decade, why is it being run?’
The Flipkart management has started its cost-cutting measures. That did not stop its losses though, which were Rs 5,223 crores in FY 2016, from surging to Rs 8,771 crores in FY 2017.