Flipkart Aftermath: How E-Commerce Sites Are Bleeding

India’s E-Commerce market has a total value of $20 billion. In this business, Flipkart has somehow managed to maintain its first rank. Amazon, the biggest rival of this giant came second in this market. It is Amazon only that gave neck to neck competition to Flipkart in 2016. Amazon even outsold it in many months of last year. But ultimately, it is Flipkart only that continued surviving at the top. We have Flipkart all over the news right now. Let us see the details associated with it.

• Kalyan Krishnamurthy Replaced Binny Bansal As CEO:

Binny Bansal and Sachin Bansal are the founders of this E-Commerce giant. The appointment of Kalyan Krishnamurthy as the CEO, has ended the era where the founders were used to be the CEOs of this E-Retail giant. Now obviously everyone would like to know about Kalyan Krishnamurthy.

Let me tell you that he is the one who joined Flipkart from the largest investor E-Commerce firm, Tiger Global. He is called as the man of ground of Lee Fixel. Now what is Lee Fixel? It is the global head of the investment of Tiger Global. The current valuation of Flipkart is $5.5 billion.

• Tough Competition To Flipkart From Amazon:

It is facing huge competition from Amazon. During the Diwali sale, when Flipkart focused on electronics, large appliances, fashion, etc, Amazon on the other side, focused on everything of daily needs. This resulted in Amazon selling more products than Flipkart. However, it made less profit than Flipkart did.

In June 2016, Amazon proclaimed that it will invest $5 billion, instead of $2 billion, into India. Since then, Amazon continued to promote itself. It has launched several new categories and private labels. It also started Amazon Prime privilege membership as well as videos, with exciting offers. Seems that the war has just begun between the two, isn’t it?

• Demonetization Impact On Revenues Of Several E-Commerce Companies:

Since the demonetization scheme was launched, it has adversely impacted the revenues of these companies. Most people choose cash on delivery option as the mode of payment other as compared to digital payment. Due to cash crunch, these E-Commerce websites suffered losses. Some websites such as Amazon, even stopped accepting cash on delivery. While others such as Flipkart limited cash on delivery mode of payment till a maximum amount of Rs. 1000. All these companies even stopped accepting banned notes of Rs. 500 and Rs. 1000.

After the October sale, Flipkart decided to reduce the amount spent by it on the advertising. This was done to ensure more profit as heavy marketing expenditure was reducing the profit. He even decided to trim Myntra‘s supply. However, in 2016, the amount spent by these E-Commerce was Rs. 7,252 crore, which is 26% more than the amount spent in 2015. Amazon itself has increased its marketing budget from Rs 766.3 crore to Rs. 946.4 crore in 2016. They believe that only funding can help them in the longer run.