OMNITECH RETAIL PROFESSIONAL

In the past, the role of large anchor sellers like WS Retail in the Flipkart story has been well reported. Some recently created intermediaries which will buy from FlipkartвЂ™s B2B entity and sell to above sellers are companies like Sports Lifestyle Private Limited, Premium Lifestyle and Fashion India Pvt Ltd and Wishberry Online Services Pvt Ltd. Companies like SuperCom Net, OmniTech Retail and Retail Net. The Flipkart Group sells the products bought by it to sellers related or controlled by it, who then further sell on the marketplace. Simple math shows that these goods were discounted by as much as Rs 1,643 crore.Д«ut as Flipkart was buying more, it was also discounting more. In FY18, the figure for the cost of goods sold was Rs 26,876.5 crore, and these goods were sold for Rs 25,234 crore during the fiscal year ended in March 2018. The company held Rs 10,295.7 crore in current financial assets at the end of FY19. The company spent Rs 1,65,357.5 crore in the purchase of investments during FY18. Another Rs 1,152.7 crore was spent on unexplained вЂњ other expensesвЂќ.ДЇlipkart has an aggressive corporate finance policy and tends to utilize funds for current financial assets whenever possible.

OMNITECH RETAIL PROFESSIONAL

During the last fiscal, Flipkart spent Rs 2,873.4 crore in advertising and promotions, up 55.36% from Rs 1,850 crore in FY18 and professional expenses also grew almost 70% to Rs 496.5 crore.

Moreover, employee benefits expenses also increased by 58.5% to Rs 4,254 crore in FY19 as the company was focusing on scaling growth.

Over 50% of Flipkart GroupвЂ™s $12 billion estimated Gross Merchandise Value (GMV) in FY19 is accounted for by the $6 billion worth of goods that it bought for eventual sale on its platform. So, the cost of goods sold rose by 44.34% during FY19.ДЄn important question that arises here is why does a technology platform need to buy and sell goods on such a large scale? If the FDI regulations for e-commerce are being earnestly implemented, why does a вЂmarketplaceвЂ™ like Flipkart need to buy goods at all?ДЄnd, why would it need to increase its purchases by 44% in a fiscal if Press Note 2 & 3 are being followed in letter and spirit as demanded by the Commerce Minister Piyush Goyal? Vedansh Pratap | EntrackrДuring FY18, Flipkart had sold goods costing Rs 27,375.5 crore, and this figure rose to Rs 39,484 crore in the last fiscal. As compared to FY18, the company spent Rs 12,140 crore more on buying goods. The rest, Rs 7,825.2 crore, was made by charging platform and logistics fees from sellers. Interestingly, 81.75% of the operational revenue вЂ“ Rs 35,053.3 crore вЂ“ were generated through sales of goods on FlipkartвЂ™s online platform. DвЂ™Mart, Future Group (Future Retail & Future Lifestyle), Aditya Birla Fashion & Retail, Shoppers Stop and Trent had together bought goods worth Rs 43,374 crore for further sales in FY19.ДЇlipkart bought goods worth Rs 39,514 crore, which is more than 90% of IndiaвЂ™s five leading retailers put together, as per its annual filing with the regulator in Singapore.ДЇlipkart earned a total of Rs 42,878.5 crore in revenue from operations during FY19 and another Rs 737 crore from non-core aspects. However, if you zoom in at the financials of its Singapore parent Flipkart Private Limited, you will be convinced that the Walmart-controlled entity is a retailer and not a marketplace as it should be.Дuring FY19, Flipkart Group on its own bought almost as many goods as IndiaвЂ™s leading retailers put together. Flipkart is a marketplace and a technology platform that is meant to connect buyers and sellers as per FDI guidelines set in India and by its own definition.

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