is going with its message of strong business momentum and “innovating for the customer” in the face of a massive markdown by Morgan Stanley.
The ecommerce company, once thought to be worth $15 billion, is now only worth $6 billion, according to a Morgan Stanley
fund. The company, however, is putting up a brave front, saying market valuations aren’t all that important.
Earlier this year, Flipkart
CEO Binny Bansal
started talking about customer-centricity. In May, he followed Amazon
and Snapdeal in cheering for customer service over GMVs – a metric that was considered the holy grail of all ecommerce growth till then.
The jury, however, is out on whether Flipkart
is still king. Over the past few months, the company has seen a slate of top-level executives, including finance chief officer Sanjay Baweja, quit. It’s also been involved in awkward situations regarding hiring, and fund-raising.
In a fiercely contested market, the company has been trying to defend its turf against Amazon
India. During the first few days of India’s biggest shopping season, Flipkart
in number of units sold.
is hovering over both of them.
Under these circumstances, a markdown is not necessarily always a bad thing for startups that have been commanding extremely steep numbers. The Indian startup ecosystem has been buzzing with whispers of how Flipkart, Ola, and some others are finding it hard to get investors to give them money at current valuations.
In the case of publicly traded companies, it is not uncommon to see long-term investors buying stocks on apparent bad news. Because startups don’t have these external checks and balances, the market takes cues from current investors.
This is an excerpt from Tech in Asia. You can read the full article here