Switching to IPO is the newest talk of the industry as it helps in capital expansion! And, Flipkart is the latest Indian start-up to enter the race!
Yes, you hear it right as Walmart’s CEO confirms the statement. The fact cannot be denied that Flipkart contributes a significant amount in Walmart International’s annual turnover that was US $ 33 billion in the fourth quarter of FY20.
Flipkart possesses 70 per cent of the online fashion retail market in India, which is equal to 10 per cent of the total apparel market in India.
Though the company is still making losses, yet the trend signifies improved performances in different quarters.
The revenue of Rs. 43,615.50 crore for the 12 month-period ending March 2019 is an increase of a little over 42 per cent over the previous year. The losses were higher in absolute terms that equal to Rs. 17,231.50 crore, but were comparatively down by 63.2 per cent.
To enter the IPO route, Flipkart is a perfect fit for the US retailers. Focusing on how to reduce the losses, Walmart has asked Flipkart’s Myntra to streamline their processes.
This also includes shutting down small warehouses and store inventories across India that do not meet Walmart’s standards. There have been clear instructions to reduce the hefty discounts offered by Myntra as the expense comes at the cost of profits.
All these measures might create a short-term impact on Myntra’s growth and profits!
Back in 2018, Walmart had acquired around 77 per cent stake in Flipkart and paid US $ 16 billion for this share. Ever since shutting down Jabong in February, Flipkart has been directing all the customers to Myntra.
