Indian E-commerce company Flipkart faced another devaluation after US based investment firm Vanguard devalued the company by 25%. The company has been down valued for the sixth time in the recent past questioning the billion-dollar valuation that these e-commerce companies boasted about. Beside Vanguard, other firms named Fidelity Rutland Square Trust II, Valic Co., and T. Rowe Price each has marked down Flipkart once while a fund managed by Morgan Stanley has twice devalued its value.
Responding to query by Financial Express, Flipkart’s Sachin Bansal said
“I do not think much of the markdowns. We should just focus on execution and keep our heads down on serving our customers.”
Flipkart has been under pressure for some time now after a series of new developments in the Indian e-commerce space. Flipkart has been revamping its business to tackle the challenges that lie ahead of it. Alibaba has announced big acquisitions and Amazon has announced further funds to carry out its future prospects. Flipkart on the other hand has decided not to secure any new funding as the company is well capitalised as per Sachin Bansal. Bansal, referring to Uber, has shrugged off these new valuations. He believes that the company can still raise funding at a higher price despite the mark down and the e-commerce company has absolutely nothing to worry about.
Flipkart is revamping its business on grand scale to bring down cost. The company, which was ranked number 1 by LinkedIn as the most desirable Indian company to work in, is planning to bring down its cost by 30% by employing compound methods of merging various departments, minimum hiring and centralise purchasing according to a report in ET. The company will be merging its various categories such as decor, furniture, large and small appliances into one – Home category. This will enable the company to acquire material as well as storage facilities at much lower rate and will also give the company leverage while dealing with a single seller.
Flipkart has long remained the undisputed king of the Indian e-commerce space but now as the markets is developing, its position is looking more and more in perils. It will be worth watching if these steps proves to be beneficial or not.