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Flipkart Bubble Burst Earlier Than Expected

Internet era just started in India and expect to get better with every passing day. All credit goes to enhanced wireless network supported by lower tarrif rates. Exactly a year back that Indian e-commerce is in bubble. The darling of Indian e-commerce is Flipkart, number one player in India catched every eyeball given their virtual growth. The late entrant and experienced competitor Amazon played it hard supported with their well tested e-commerce ecosystem. Flipkart at one end kept raising funds at beyond expectation valuation whereas deep pocketed Amazon decided to pour in billions of $ into their processes.

At one point of time, Flipkart flashed others hard earned money to hire resources without goals, offices in order to get more eyeballs to get their business rolling.The deep discounting by Flipkart were enjoyed by seller and buyers whereas Flipkart were only interested in valuation, GMV and userbase to support their valuation.The regulation from commerce ministry hit every player hard but Indian e-commerce got badly hit which prohibited them to offer deep discounting.

The growth in general economy and slowdown in e-commerce segment turned Flipkart valuation as their biggest nightmare. Dragon hit them hard when Demonetization Drive started. We all know that their Smartphone business constitute major chunk of their revenue which led many investor to mark down their valuation even though Flipkart denied it.As per the report published in Economic Times that Flipkart is seeking government help to refine the rule of business where they want $ but not international companies in India is nothing but shows their maturity level.

I was sure that this day will come but it came way before by expectations. It's still early Dec 2016 and Demonetization Drive will bring many more regulation which will block Internet user ability to buy from e-commerce company using cash on delivery. Hard time just knocked Flipkart and full movie is yet to come.

Still it's not late if they focus on cost cutting, profitability and generation of alternative revenue. Buying a stake in other company is easy but the capability to imagine the integration and benefit is more important which is not there in Flipkart. I wish all the best to Flipkart that their plea to government will be heard off.

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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