Flipkart can soon get an investment of $1billion from Walmart
According to reports, online marketplace Flipkart is all set to double its growth pace. It is also planning to save$150 -200 million by December 2017. Notably, the company will also not infuse any fresh capital into the business until a new investor joins the company.
The main motive behind this move Flipkart is to boost the growth for which savings from cost cutting will be deployed. Also, the company intends to generate surplus cash through operational efficiencies.
The experts are saying that emphasizing on spending curbs and expansion could be aimed at making the E-Commerce giant, Flipkart more attractive in terms of investment.
Walmart and Flipkart
Flipkart is said to be in talks with Walmart for an investment of $1billion. Notably, the burn rate of the company was at its highest two years ago when spending on customer acquisition was at peak. Now the E- commerce giant has revealed that it is trying to lower down its burn- rate since January 2016.
The company has also claimed that despite of spending less on marketing strategies, the company has earned more than its rival during the festive season. Flipkart has also claimed that they sold 15.5 million units during the flagship Big Billion Day Sale compared with Amazon’s 15 and Snapdeal’s 11.
Until the last year, the burn was the measure of negative cash flow. And it was used by the companies as a weapon to beat their rivals, and to win the market. Interestingly, it worked, especially in the e –commerce sector because investor used to fund the companies.
However, the investment environment has now shifted from expanding at all costs to sustainable growth and companies are now left with no other option but to burn less money.