Flipkart in Trouble?

Flipkart in Trouble?
Case Code: BSTR522
Case Length: 12 Pages
Period: 2007-2017
Pub Date: 2017
Teaching Note: Not Available
Price: Rs.300
Organization: Flipkart Online Services Private Limited
Industry: E-commerce
Countries: India
Themes: Business Strategy
Flipkart in Trouble?
Abstract Case Intro 1 Case Intro 2 Excerpts


What Went Wrong?

Flipkart reportedly lost Rs. 140 million per day in FY 2016. The number of monthly active users on Flipkart had been “significantly declining,” in 2016 according to New York-based data analytics firm 7Park Data (See Exhibit III). The minutes per active user declined by 42.6% in the first quarter of 2017 compared to a year earlier. According to industry observers, a series of missteps in 2015 and 2016 had changed the state of the company drastically...

The Road Ahead

Despite a growth in revenue, Flipkart losses doubled to Rs 23.06 billion in the year ended March 31, 2016, as it battled Amazon to retain leadership in the country. The company posted a loss of Rs 10.96 billion in fiscal year 2015. The e-tailer reported revenue of Rs 19.52 billion during fiscal 2016, a 153% increase compared to its revenue of Rs 7.725 billion in the corresponding period of the previous year. “While Flipkart has made several changes to its organisation structure with a big reshuffle in its top management, the company still requires capital to burn and stay in the game with Amazon. A focus on profitability might keep investors who're looking for exits happy, but if the company isn't able to boost efficiency to continue undercutting the cost of products for customers, it could lose the game,” said Alnoor Peermohamed, Principal Correspondent at the Business Standard newspaper...


Exhibit I:Flipkart’s Timeline
Exhibit II: Market Share of E-tailers in India (2014-15)
Exhibit III: E-Commerce in India (Monthly Active Users)
Exhibit IV: Change in User Behavior for Amazon and Flipkart (Q1 '16 to Q1 '17)
Exhibit V: E-commerce Mobile App Engagement in India (March 2017)
Exhibit VI: Retail Ecommerce Sales in India (2013-2018)

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