If Flipkart losses haven’t alarmed Walmart, Amazon India’s should

Walmart has shown a massive amount of courage by entering a market where the American e-commerce giant Amazon has invested billions of dollars.

If the U.S based multinational retail corporation is in a state of dismay with the losses incurred by the Flipkart acquisition then it hasn’t shown any signs of it. Instead, it announced that Flipkart operating loss may be driven upwards towards a figure of $1.85 billion in FY20. The figures are too high for the loss of $685 million.

The Indian e-commerce said that it suffered an operating loss relating to its consolidated balance sheet before paying interests and taxes. Walmart has factored in larger losses that are continued forward, however, the concept has been a soothed strategy.

“You cannot out-Amazon Amazon, by trying to sell below cost and wait patiently. Even if you are a company with deep pockets, Amazon can out-wait you, since it is not only how they do business, they (also) have investors who have accepted them on their terms,” – said a professor at New York University’s Stern School of Business, Aswath Damodaran.

Amazon is preoccupied with the dominance of the market and it seems to have unmoved by the price to obtain the market fancies. “We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position,” – said Jeff Bezos to the shareholders of the in the annual report.

However, the report expenses on the mark are to be precisely comparable or not. However, at the verdict, Amazon India spends on its market.

“There is no scarier vision for a company than the news that Amazon has entered its business.”- says Damodaran in his blog. It seems that Walmart is perturbed by its decision which makes it a bravo instead of bravery.

by Sawan Kumar on June 7, 2018

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