$40M Monthly Burn: Flipkart CEO Urged to Slash Costs

According to reports, Flipkart, the massive e-commerce company owned by Walmart, intends to restrict the growth of its Flipkart Minutes rapid commerce division to the top six to eight cities in order to minimise capital burn.

The top eight cities account for over 90% of quick commerce volumes, with Bengaluru, Mumbai, and Delhi NCR accounting for the majority of this, where Flipkart is expanding with Minutes." Flipkart Minutes operates a network of over 300 dark stores, or micro warehouses, and is now available in 14 locations.

 It is a competitor to Amazon Now, Swiggy Instamart, Zepto, BigBasket's BB Now, and Eternal-owned Blinkit. According to a media report, the goal is to grow this up to about 500–550 by October.

Flipkart Carefully Spreading its Wings

As a result of this action, Flipkart is now approaching growth more cautiously, similar to Swiggy, whereas Eternal is growing rapidly regardless of immediate financial gain. In the meantime, Flipkart wants to reach 500–550 customers through its dark shop channel before this year's "Big Billion Days" promotions.

 However, analysts at broking firm HSBC Securities noted in a research note on May 12 that it is also under pressure to cut its continuous cash burn of about $40 million per month in half over the next few quarters in an effort to launch its IPO.

The company's intention to move its headquarters from Singapore to India in preparation for an IPO in 2026 was approved by Flipkart's board last month. Nearly a year after Flipkart got $350 million from Google as part of a $1 billion fundraising round headed by Walmart, the domicile shift procedure was started.

More recently, Flipkart invested INR 3,248.9 Cr in Flipkart Internet, its marketplace division, through its Singapore holding company. Flipkart has established new alliances despite limiting its goals for rapid commerce expansion.

 In order to introduce its smartphone line on Flipkart's e-commerce platform and its Minutes rapid commerce sector, French smartphone manufacturer Alcatel formed a "retail" agreement with the company in April. Flipkart's collaboration with Alcatel coincides with the Competition Commission of India's scrutiny of the company's exclusive product releases with OEMs such as Xiaomi and Samsung.

Flipkart’s Financial Outlook

The internet giant and competitor Amazon were found guilty by the watchdog's internal investigation last year of breaking antitrust laws by favouring specific vendors on its platforms and engaging in aggressive pricing practices.

Flipkart is concentrating on enhancing its financial performance as it gets ready for its public launch. Flipkart Internet's losses decreased 41% to INR 2,358 Cr in FY24, while its sales increased 21% year over year to INR 17,907.3 Cr.

According to its financial report, the company's advertising earnings in FY24 exceeded its marketplace fees. The industry is one of the fastest-growing in India, with a 37% compound annual growth rate (CAGR) predicted to reach $40 billion or more by 2030, according to a report published by a media house. In 2024, more than two-thirds of all online grocery orders were placed through quick commerce.