Shopclues - E-Commerce startup

I read in BS today that Shopclues, an Indian e-commerce venture, made Rs.100 crores loss on a revenue of Rs.79 Crores. How can a company make more losses than revenues in a year? Are they giving away money with their products to their buyers? more  

View all 33 comments Below 33 comments
Vinay Joshi .... first of all it is said that gentlemen do not use abbreviations or short forms when they communicate, their communication is clear and most simple using simple words. So with your comment and abbreviations like M&A I can make out that you are not a gentleman. Now coming to the context... looking at your post it seems that VC's are fool of the fools who are investing money to fund Rs. 100 crore on a sale of 75 Crores anticipating a return in 8 years. Now give me one ... only one example where a VC has invested 75 crore and got worthy returns in 8 years. And the last IIM is operational since last 52 years generating a talent pool of 3000 students per year but there are only 26000 companies listed on stock exchange(s). do the math. more  
Generally investors in a start up considers 3-4 years as a gestation period for any start up. Losses bound to happen for those years. However, if after those years also the company incurs losses then they consider something is wrong and we should not stay invested in the same. more  
Mr. Hari, This may sound interesting to you but this is very common with the companies which take VC money. The money that they are loosing is not their own but VC's money. Most of these big companies would become making profits only after 2024. Surprised ? The valuation of the company is always based on future cashflow. The valuations are pretty crazy at this point in time. But if you look at the market potential the valuation doesn't look very stretched. In order to achieve their growth targets, they would need to get more customers and show the traction to their investors. Because of the excess cash that they have, companies are adopting interesting ways to acquire the customers. One of the tactics is giving huge discounts , free delivery etc. This definitely results in operating losses. They are also trying to acquire talents by giving excellent packages to IIT/IIM grads. Another issue is our infrastructure. It is very poor at this point in time. This also increases their expenses. Anyways, this trend would continue for some more time especially in eComm space before M&A kicks in. Regards, Vinay more  
Shopclues, flipkart, snapdeal, zomato, pepperfry are common names which are heard by us but none of them are making money. Its all valuation game, in order to understand more you can mail me on my mail id. Incidently in the initial years flipkart was despatching a 25 rupee book free whereas it was paying 200 rs on courier charges. more  
Only solution is for common folks like us to stop investing in stock market. I have gotten rid of all of my shares etc. When the stock market become devoid of retail investors like us, then all these games of valuation and market penetration will stop. more  
Post a Comment

Related Posts

    • Layoffs everywhere

      Layoffs going on in full swing in IT sector! Daily 1-2 news coming in closed circles... crazy consolidation. Worser than 2000, 2002, 2008-2009 and 2015.

      By Vijaya Nair
    • Terrible job market

      36% students from IIT bombay are unemployed at graduation. Where exactly are we headed as a nation. Imagine the state at NITs and other govt engg colleges. Private colleges to we must forget only. ...

      By Ajay Dutta
    • GST number is designed to compromise your details

      Dumbest thing in GST is using PAN as GST number and Mandating displaying GST number in Sign Boards. So that everyone on street knows our PAN. PAN is used as password in income tax docume...

      By Vinay Sen
    • Will many CAs may have to close soon

      Many CA, CS and CMA Professionals have to either change work or close their practice after this attached circular.

      By Ajay Dutta
    • Google is a pathetic company

      Google India hiked the rate of business mail by 350 %. With fear of recession looming and when msme are struggling this is not the right thing to do. It will cost msme sector 5000 crore per year...

      By Vishal Khanna
    • GST filing

      Still GST system is not 100 % user/official friendly. there are news that so much money (in lacs) collected by fraudulent GST bills. I am a GST registered vendor. The company turn over is almo...

      By Subramanian Venkataraman
    • Taxation Issues faced by Startups: Inputs Sought

      Many of you know how LocalCircles had worked with the Government in 2019 on resolution of angel tax issues under Section 56 (2)(viib) of the Income Tax act. Once again, the Government h...

      By LocalCircles Manager
    • Why no penalty an dprosecution for govt

      Now our IT portal has become sick being suffering babu virus or extortion virus. McA site never works on last days and people have to pay penalties for mistakes of govt. Now professionals are wasti...

    • Income Tax Return Filing Portal

      What about income tax return filing date? Any extension thereof? As of today, I am not able to file the return . Has any one else file the income tax return? Has Portal issue been solved? I have al...

      By Hasmukh Sangani
    • Grass root experience

      I have been doing and promoting small business for the last 30 years. The real problem is that the ministers and their secretaries don't have practical experience and they look for 5 trillion dolla...

    • Why do Ministers refrain from engaging with businesses

      I find it quite interesting that the ministers want to deal only with tata adani ambani and not the real msme and startups. Why is the msme minister (appointed this week Narayan Rane) his secretary...

      By Aditi Mitra
Enter your email and mobile number and we will send you the instructions

Note - The email can sometime gets delivered to the spam folder, so the instruction will be send to your mobile as well

All My Circles
Invite to
(Maximum 500 email ids allowed.)