Flipkart Brings New Measures To Cut Expenses And Earn Gross Profit [Too Late?]

The company will now closely look at all its units and has given a deadline of six months to turn the unit profitable. After checking each unit’s long term potential, Flipkart will take a call and even plans to shut down categories within the next six months and has also capped increments at 10% excluding technology teams.

As the battle among e-commerce players intensifies and survival gets tougher everyday, Flipkart’s newly appointed CEO Binny Bansal has introduced a number of measures which will help the company ensure sustainability and reduce its burn rate.

Also, to lead the retail market in the month of September during festivals Flipkart plans to curb its expenses as looking for external funding is not so easy for the e-commerce giant anymore.

The company will now closely look at all its units and has given a deadline of six months to turn the unit profitable. After checking each unit’s long term potential, Flipkart will take a call and even plans to shut down categories within the next six months.

On the mission of reducing its burn rate, Flipkart has now also capped increments at 10% excluding technology teams. The team heads have also been given sales and customer experience targets which are to be met by September 2016.

Binny Bansal has also been focusing on the logistics arm Ekart and plans to make it an independent unit.

Earlier in February Morgan Stanley had marked down Flipkart’s share value by 27% which has raised serious concerns for the investors and questions on its business model.  The changing of track from expansion to sustainability just might be the right step for the e-commerce giant now. Or is it too late?

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