Flipkart will continue funding discounts to win customers: Sachin Bansal


E-commerce major Flipkart will continue to fund discounts to win customers and stay ahead of the competition while investing in back-end operations, the company's co-founder and chief executive Sachin Bansal said in Mumbai. "As Flipkart, and the overall e-commerce industry continue to grow the business, we will continue to pass on discounts to the consumer," Bansal told reporters.

Customer and seller acquisition as well as heavy investments in back-end operations will be the focus of the company in the next few years. In the next 3-5 years, the company plans to invest more than USD 1 billion in infrastructure and technology, he said. The company has recently infused over Rs 600 crore in its logistics business EKart.

In order to build the business, technology and pricing are the areas where the company is investing heavily as it is in customer acquisition mode, he said. Outside of technology and pricing, Bansal said Flipkart's cost of operations has "significantly come down, to mid-single digits". Online fashion retailer Myntra, which Flipkart acquired in 2014, has also turned profitable at an operational level, "excluding cost of technology," he said.

While the company claims lower operational costs, the overall sales of e-commerce firms are running into losses due to deep discounts. Flipkart is among the highest valued e-commerce entities in the country at USD 15 billion, and has liquidity to run the business for another year, after which they require to raise further capital.


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