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Offline retailers slow e-com blitz

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Delhi: According to a report in Business Standard, the combined losses of Flipkart, and – India’s top e-retailers – were Rs 4,984 crore during 2014-15.

Flipkart sues Uttrakhand for taxing e-buyers
Flipkart believes that this move is anti-consumer and against public interest

The report goes on to state that three of the largest, listed offline retailers – Shoppers Stop, Tata’s Trent and Future Retail have reported a smart rise in net sales as well as net profit for the quarter ended December 2015.

Does that mean it’s endgame for the online players while traditional brick and mortar companies would walk away as ultimate winners in the retail game? Not true, say analysts, stakeholders and industry watchers.

While it cannot be denied that many have shut shop and several are struggling, the Business Standard report says the business case for e-retail remains strong.

In the meanwhile, a potential reset in the valuation of Flipkart, India’s startup poster boy, is likely to accelerate an anticipated correction in the valuations of internet companies, according to several investors.

The Morgan Stanley fund in a regulatory filing on Friday pegged the value of Flipkart’s shares at $103.97 apiece as of December 2015, down from $142.24 apiece as of June 2015. At that price, Flipkart’s valuation would plunge to its December 2014 level of about $11 billion (about Rs 75,680 crore at current exchange rates).