For the last few years, the Indian startup environment has been thriving. No one has exemplified that more than Flipkart, the nation’s first unicorn startup. The e-commerce giant battled Amazon for years, before being bought out in a mega-deal earlier this year as Walmart sought to finally enter the Indian market as a major player.
However, there was one major sticking point reported at the time which continues to baffle. Through all its successes and failures, Flipkart never once made a profit. Whether in the early years as an online book seller or the last couple of years when they tried to expand into manufacturing their own phone, Flipkart has always been working with massive monetary losses.
And, this is not just a Flipkart problem. No e-commerce company has made profits in India, ever. Despite the fact that there are regularly new reports claiming that the Indian e-commerce – and specifically the online grocery shopping – market is going to be worth hundreds of billions in the next decade, not enough people are shopping online yet.
Even Amazon, the company that made its name in the industry – and arguably even popularised the industry itself – has never made profits in e-commerce in India. The only reason the American giant has been profitable in the country is because of Amazon Web Services, which remains one of the biggest cloud services players in India and across the world.
To find out exactly why there is such a contradiction in the industry, we turned to Deepak Shenoy in the latest episode of The Capitalmind Show. The CEO of Capitalmind Wealth had some interesting answers for us, as well as some explanations for commonly held beliefs in the industry. Plus, why the Walmart-Flipkart deal was great for everyone involved!
You can also listen to this video as a podcast here.