Flipkart to add more items on its list, to boost GMV to Rs 76,000 crore

Flipkart is all set to achieve another milestone as after aiming for a $15-billion valuation, the most valuable online marketplace is vying to reach its next landmark - $10 billion in total worth of goods sold.

Flipkart is adding highmargin categories such as furniture, homes and travel booking and sharpening its strategy in response to rivals Amazon, Snapdeal and Paytm gaining bulk rapidly.

Flipkart expects this to boost its annual Gross Merchandise Value, or GMV, to $10-12 billion (Rs 64,000-76,000 crore) in 9 months to a year.

Economic Times reported that this was a slight bump-up from its present GMV forecast of $8 billion for the year to March 2016, and more than double the $4 billion it achieved in 2014-15, a pace eclipsing the growth of several top online and brick-and-mortar rivals.

"This will be a big milestone for us," Mukesh Bansal, head of commerce at Flipkart, said in an interview to ET. Flipkart reached $1 billion in annual GMV in 2013-14. The Tiger Globalbacked firm was seeking to raise funds at a valuation of about $15 billion, up from $11 billion reached in December.

The company is preparing to start selling homes, travel deals and groceries by the end of this year, three people aware of its plans told the financial daily, on the condition of anonymity.

However, Bansal did not confirm the plans.

"We want to be a one-stop shop for every need,” he said.

Flipkart is confident of doubling its GMV run rate - annual projection based on current GMV - even if sales growth slowed in certain months, said Bansal, also the chief executive of the company's fashion subsidiary Myntra.
GMV is a key e-Commerce industry metric, measures a firm's growth based on the maximum price of goods and services sold on its platform and not by actual revenue, which could be much lower.

"We felt at the start of the year that 100% growth at this scale is quite substantial. This quarter we will be on track for almost 35% growth as compared to the previous quarter (January-March), which was slightly more than the October-December quarter at 4-5% because of the Big Billion Day (sale) in October," Bansal told ET.

The growth of Indian online retail has been dependent on discounting, but companies are now looking to lower spending on discounts and promotions while staying competitive.

"I sense a period now where even though e-tailers will not be focusing on profits; there will be more focus on margins as compared to GMV," Niren Shah, managing director at Norwest Venture Partners told ET. Norwest Venture Partners has backed online retailers including Fashionandyou and Pepperfry.

Indian online retailers suffer 35% gross losses on each unit of GMV sold, according to a recent Goldman Sachs report. "With this discounting strategy, we note that these three e-tailers (Flipkart, Snapdeal and Amazon India) now account for nearly 80% market share in the e-tail space, led by Flipkart at 45%," it said.

(Image: Indiatimes)