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Writer's pictureNishant Mittal

Flipkart, Amazon in 2024...and what Kishore Biyani said in 2010

In FY24, Amazon's seller services posted a revenue of ₹25,406 Cr at a loss of ₹3,469 Cr. This was Amazon's 10th year of operations in India.


In comparison, Flipkart Internet posted a revenue of ₹17,907 Cr in FY24, at a loss of ₹2,358 Cr. Flipkart's been around since 2007.


But this doesn't tell the whole story.


Flipkart's B2B arm (Flipkart India Pvt Ltd) did revenues of ₹70,542 Cr in FY24 at a loss of ₹4,194 Cr (these losses include the ones mentioned above). And Amazon's B2B arm (Amazon Wholesale) did revenues of ₹3,567 Cr in FY24 at a loss of ₹342 Cr.


So essentially, in FY24, Flipkart India did a total revenue of over ₹88,000 Cr at a loss of over ₹4,000. While Amazon India did a total revenue of about ₹29,000 Cr, at a net loss of over ₹3,811 Cr. (This does not include some ancillary businesses like Logistics, payments, etc., none of which make money right now).


Quite amazingly, both of these companies have lost way over ₹30,000 Cr each, ever since they started doing business in India. And despite nearing ₹1 Lakh Crore and ₹30,000 Crores in revenue after over a decade of operations in the country, they aren't close to making money. In fact, with the advent of quick commerce, they'll have to lose even more for the foreseeable future. Furthermore, given the current situation, it's quite possible that Amazon India totally fails and is never able to make money from its retail operations in India, despite having invested about $10 Billion here.


Now about 15 years ago, this is exactly what Mr. Kishore Biyani was saying. Quite plainly, but loudly, he used to say something like, "these companies will never make money in India".


While this "knowledge" didn't sound very futuristic at that time. In fact, it didn't even help him avoid the absolute Hollywood style ruining of his company (Future Retail), was he really wrong?


No, he wasn't. But there was an important piece he probably didn't see back then. It was the 'time horizon' for which the money bags will keep funding the game.


Mr. Kishore Biyani probably saw this model not making money for a while, and then the funders pulling out, regretting their misadventure. But what he perhaps didn't see (or even imagine) at the time was that the money bags will open the infinite tap for these companies, and basically forever. With the zero interest rate phenomenon, VCs went big on this thing with way more time and money on their hands than he could ever foresee.


He found himself in the path of the tornado, not expecting that the storm would last as long as it has (and will). And that was the end of it.


Flipkart was valued at $21 Billion when Walmart acquired it, buying 77% for $16 Billion. The company's now worth $38 Billion on paper. A recently hived off subsidiary, PhonePe, is itself valued at $12 Billion. Whenever both of them list, it's going to be a payday for Walmart.


What about Flipkart making money? Not in terms of the valuation rise, but actual profits? Someday it'll happen, for sure. Someday..



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