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Flipkart Readies For A Price War With Amazon

July 19, 2016: 12:00 AM EST
India-based online retailer Flipkart Ltd. is preparing for a market war with bigger rival Amazon. Established in 2007 by Binny and Sachin Bansal, Flipkart managed to grow into the country’s biggest e-commerce company. Proving naysayers wrong, the company also proved its founders’ assertion that India was ready for online retail. Flipkart reached $100 million in sales in 2011; however, its infrastructure, including warehouses and servers, could not keep up with its rapid growth. Then, sales stagnated, an attempt to focus on mobile failed, important executives left the company, and in early 2016, a Morgan Stanley fund downgraded Flipkart’s value from $15 billion to $11 billion. With the local e-commerce company losing ground to its foreign-based rival, Amazon CEO Jeff Bezos’ promise to invest another $3 billion in his company’s Indian operations signals more challenging times for Flipkart.
Saritha Rai, "India's Flipkart Has an Amazon Problem", Bloomberg, July 19, 2016, © Bloomberg L.P.
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