Kalyan Krishnamurthy, the group chief executive of Walmart-led ecommerce giant Flipkart, which has been scaling up its businesses amid continuing to be a loss-making entity, said that it is nearing profitability on the back of a significant reduction in monthly cash burn.
Krishnamurthy, who was addressing his employees in a town hall, said that the ecommerce major has been working to reduce its costs for the past two years, ET reported.
This comes on the same day, i.e., on Thursday (January 25), when Flipkart rolled out its Unified Payments Interface (UPI) offering to the first batch of users as another step towards strengthening its presence in the fintech sector.
A source aware of the development told Inc42 that Flipkart’s UPI offering has gone live for around 10,000 users in the first batch. The offering will be scaled up nationally over the next few weeks.
As reported by ET, the Flipkart group chief confirmed the fast-paced growth in its travel business, Cleartrip, saying that it has become the second-largest player in the market.
There are no plans for an initial public offering in 2024, he clarified, and said Flipkart continued to optimise resources.
“Krishnamurthy has discussed with senior leaders that profitability is likely this year but there was no timeline given. Even with the new fundraise in progress, he has mandated lower cash burn across businesses,” the report said, quoting one of the people present in the town hall.
Earlier this week, Inc42 reported that Flipkart was planning to acquire a UPI licence with an eye on establishing a comprehensive payments tech ecosystem, similar to Amazon Pay and others. While it would encompass bill payments, peer-to-peer transactions, and contribute to the development of the Super.Money credit marketplace, the Walmart-backed ecommerce company aims for its users to utilise the in-house UPI handle for ecommerce transactions, potentially improving checkout conversions.
Amid the business expansion, the company is also expected to lay off a few employees over the coming months.
As per a Moneycontrol report, the company is slashing around 1,000 jobs as part of its annual performance review process. Accordingly, the team size is expected to be cut by 5%. Earlier, another report said that the layoff would impact around 5-7% of the total workforce.
The company has around 22,000 employees on its payroll currently.
However, a source aware of the development told Inc42 that the layoff numbers are speculative. The company routinely conducts performance reviews and its result would only be known by the end of March-April, the source added.
It is pertinent to note with the increase in access to smartphones, UPI and the overall digital payments infrastructure have boomed in the country. Most recently, foodtech major Zomato and global digital payments startup Stripe’s Indian arm have also received the RBI’s nod to function as an online payment aggregator.
Flipkart India, the B2B arm of the company, saw its standalone net loss widen over 42% year-on-year to INR 4,845.7 Cr in FY23. In FY22, Flipkart Internet, the ecommerce giant’s marketplace arm, reported a 1.5X YoY surge in its net loss to INR 4,361 Cr.
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