Funded by foreign investors and parent companies, India’s leading e-commerce firms — Flipkart, Amazon and Snapdeal — have increased its losses by 51% in just one year to Rs 11,754 crore, to fund growth and dole out discounts to gain marketshare.
“This has deeply hurt the sentiment of investors who were expecting big bang returns in near term. This change can only be expected to intensify in the coming January to March quarter,” said Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound Research.
“Leadership changes, increased competition and multiple rounds of devaluation further added to woes of Indian startups. While the move to add increasing onus on tangible outcomes like revenue, cash flow among others is likely to bring a cheer in investor sentiment, it can well stand to hurt consumer sentiment who may not have access to the previously offered deep discounts which in turn prompted them to use services from startups,” said Gogia.