Flipkart’s IPO Gameplan: How The $36 Bn Ecommerce Giant Is Gearing Up

Flipkart is taking a reverse flip to shift its domicile from Singapore to Gurugram. As it makes a fresh push to go public, the company has lined up a host of other changes that were crucial to meet the regulatory guidelines for foraying into the Indian capital market. 

The $36 Bn ecommerce giant dusted off its IPO dream after parent Walmart last year gave it the go-ahead to list in the next 12-18 months. Flipkart went on to restructure its board and the leadership to make its mega IPO boom. It is, however, yet to accelerate its cost-cutting drive and work on its subsidiaries that are still making losses. 

Walmart is wary of the challenges that Flipkart and arch rival Amazon India have faced from the regulators over the past few years, starting from allegations related to FEMA and FDI violations to abuse of competitive laws. 

So it only makes sense for Flipkart to shift the narrative from being seen as a firm controlled by a US retailer to a homegrown company as it gears up for a fresh dash for the capital market. 

Despite projecting itself as an Indian company, which makes it different from Amazon, Flipkart has long been dubbed by local retailer bodies and regulators as a foreign entity that could push the ubiquitous kirana stores out of business.  

No wonder, Flipkart wanted to change that narrative. The decision to reverse flip from Singapore to India is aligned to its listing goals and to bypass further regulatory hurdles since more than 80% of it is owned by the US retail giant.

The company will have to cough up heavy taxes as was seen in the reverse flip by another Walmart subsidiary, PhonePe, which cost the payments unicorn $1 Bn as per most reports.

For Flipkart, the stakes involved and tax outgo is likely to be higher. 

A $36 Bn privately held company listing on Indian stock exchanges is being seen as a seminal moment for the startup ecosystem. There’s also a loud buzz among industry insiders that the Flipkart float will be much bigger than that of Paytm’s or Swiggy’s, which were by far the largest IPOs by new-age companies. 

A mega IPO of such magnitude means preparations have to be in full swing. Sources in the company shared that the employees have started getting feelers of stricter profit targets, foray into new verticals, and higher revenues.

Let’s delve deeper into Flipkart’s IPO playbook.  

Flipkart’s Reshuffle

“Flipkart has been exploring new office spaces in Gurugram since December 2024. A 100-200-seater facility is what Flipkart has been looking for,” a senior executive at one of the real estate firms the company is talking to for its new office space, told Inc42. 

Last year, the company took its first steps towards a potential IPO by strengthening its board. Flipkart brought in Dan Bartlett, Walmart executive VP for corporate affairs, as a director. 

Bartlett had already been closely monitoring Flipkart operations since the 2018 takeover by Walmart, but this appointment was seen by many as one made with IPO on the horizon. At Walmart, Bartlett oversees public policy initiatives, corporate real estate, and leads sustainability programmes.

Around the same time, the Flipkart board brought back former SoftBank managing partner Lydia Jett, after closing a $1 Bn funding round led by Walmart in which Google also invested $350 Mn.

Flipkart CEO Kalyan Krishnamurthy rejigged the top deck at the ecommerce firm after a host of vertical heads, including that of travel booking platform Cleartrip, fintech payment app heads and growth initiative heads stepped down last year.

The company also trimmed its workforce by 5%-7% reportedly through a performance review exercise. The Flipkart leadership, particularly the SVPs, have been under tremendous pressure since last year to deliver that might have caused large-scale exits at senior levels.

An internal source, however, also indicated pressure from poaching by quick commerce rivals like Zepto, Swiggy Instamart and Blinkit. 

Zepto, for instance, recently appointed Karan Attri from Flipkart as assistant director of marketing. It also roped in Shreyansh Modi to head its monetisation and growth initiatives after he left Flipkart.

Swiggy, on the other hand, appointed Amitesh Jha, Hari Kumar and Kanika Tiwari – all from Flipkart – for its quick commerce vertical Instamart as the CEO, CBO and head of the monetisation initiatives, respectively. 

Zomato-backed Blinkit too rushed in, picking Vipin Kapooria as its CFO late last year. Kapooria was senior finance director at Flipkart. 

“For any company headed towards an IPO, a spate of senior-level exits signals worry, especially when the capital flush rivals are offering fat salaries and Flipkart on the other hand will look to achieve profitability and not spend on employee costs beyond its budget. Hence, it will be interesting to see how the marketplace navigates challenges under these circumstances,” an ecommerce analyst who tracks Flipkart told us, choosing to stay anonymous.

Flipkart’s Road To D-Street 

Flipkart’s way to the Bombay Stock Exchange will see plenty of more twists and turns. Today, the focus is squarely on profit. The ecommerce major has looked to ensure that most of its subsidiaries reach break-even levels as the company is eyeing a strong bottom line. 

Flipkart grew its topline by 21% to INR 17,907 Cr in FY24, while it shrank its losses by 41% to INR 2,258 Cr. 

Flipkart generates income through seller commissions and advertising. The advertising earnings surpassed its marketplace fees in FY24, shows the company’s financial report. 

CEO Krishnamurthy told the employees in a townhall earlier this year that the company was inching close to profitability with cash burn going down significantly on a month-on-month basis.

Last October, Walmart CFO Davin Rainey said in the US retail giant’s Q3 earnings call that Flipkart posted a double-digit growth in revenue and customer base during its annual sales event. The top Walmart executive also said that Flipkart’s advertising income in FY24 at nearly INR 5,000 Cr has also majorly helped US major to grow its advertising revenue by 50%. 

Festive season sales fetched nearly $14 Bn in revenue in 2024 for all ecommerce platforms in India, according to a report by consulting firm Redseer. Flipkart and Amazon clocked 80% of the revenue share in festive season sales with various quick commerce players and Meesho also improving upon their sales growth.

“Flipkart has been a preferred buying medium for slightly higher priced smartphones for the past many years because of the attractive pricing and its partnerships with mobile companies. This helped it grab a major share in the festive season sales with mobile phones accounting for 60% of the pie,” a senior ecommerce analyst said. 

According to the analyst, consumer trends are shifting to premium smartphones, gadgets and other categories like home decor, beauty, electronics and fashion also gaining traction. “Flipkart, as a marketplace, will have to offer better services beyond the medium-priced smartphone category to prevent any dent in the market share,” they added.  

Quick Commerce: Is Late Entry Good Enough? 

The wave of quick commerce, triggered by the likes of Blinkit, Zepto and Swiggy Instamart, has given ecommerce giants like Amazon and Flipkart a tough time since last year when it comes to delivering in 10 minutes.

Not only are the quick commerce players grabbing the market share of ecommerce marketplaces in groceries, but now these instant delivery startups have forayed into high-margin driver categories like fashion, electronics, large appliances, too. 

This means that Flipkart and Amazon are left with no choice but to revisit the delivery strategy. Flipkart tried instant deliveries with Flipkart Quick, launched a few years ago, promising grocery deliveries in 30 minutes.

At that time, even e-tailing giants banished the idea of instant deliveries working in a market like India. Fast forward to 2024, Flipkart held talks with various quick commerce players, including Zepto, and almost defunct Dunzo to acquire these companies.

Flipkart had last August rushed to launch Minutes, a 10-15-minute delivery feature, on the app. The company is expected to leverage its massive logistics fleet through Ekart and warehouse capabilities to shore up its quick commerce ambitions after it gave up on its idea of acquiring an existing player.

Dunzo chief executive and cofounder Kabeer Biswas, who joined Flipkart last month, is likely to head the quick commerce initiative, though no formal announcement has been made as yet.

For now, Flipkart has offered accessibility to products in grocery, home decor and electronics for quick deliveries in select cities. The analysts say that Flipkart’s existent advantage in mobile phone categories could help it drive higher average order value (AOV) even if it is not able to scale up the volumes.

Our conversations with the quick commerce leaders reveal that the industry is ripe for multiple players in the game and will require capital for the next few years before consolidation, which makes sense for Flipkart to make its late but significant entry into an aggressively growing market. 

The challenge the Bengaluru-based ecommerce firm might face is balancing the costs involved while expanding its quick commerce business and aiming for an IPO which requires it to chase profitability at all costs.

Will Myntra Be The Golden Goose?

Perhaps the biggest turnaround in Flipkart’s business for the last one year was when its fashion marketplace Myntra made profits. It turned around from a loss of INR 782 Cr in FY23 to a profit of INR 31 Cr in FY24 with the revenues growing 14.7% to INR 5,121 Cr. 

What was the game plan? Myntra brought down its expenses substantially which helped the Flipkart subsidiary to turn profitable. In fact, multiple sources believe that Myntra may potentially go for a separate IPO as it sits on a massive 40-45% fashion ecommerce market share in India where it competes with the likes of Amazon Fashion, Reliance-owned Ajio and Nykaa Fashion. 

The year 2024 saw Myntra recasting its in-house (private label) brands, partnering with international beauty and fashion companies and onboarding Indian D2C brands to strengthen its revenue play.

It has also introduced features for premium and Gen Z consumers delivering from international locations to India.

 The strategies have so far worked in Myntra’s favour in the fashion category, though it is now testing waters in beauty and home decor spaces where it competes with well established, niche players. 

Reliance Retail’s efforts to relaunch its $10-Bn fast fashion brand Shein in India too may dent Myntra’s commanding market share in the segment. Like Myntra, Shein too operates in the mid-priced fashion turf, appealing to GenZ and millennial consumers.

“Reliance will launch the Shein brands on Ajio, unlike in its earlier avatar, where it was a separate marketplace. This may worry Myntra but at the same time, with Walmart’s backing, Myntra should also be able to exclusively rope in popular fast fashion brands from overseas which would give it a competitive edge,” an ecommerce analyst said.

The Cleartrip Factor

Cleartrip, Flipkart’s online travel and hotel booking platform, has struggled to keep its losses under control even when revenue increased sharply, like in FY24. 

The online travel aggregator’s net loss jumped 18.5% to INR 810.3 Cr in FY24 from INR 683.8 Cr in the previous fiscal, while revenue from operations was just under INR 100 Cr. 

The OTA also saw a spate of exits with its CEO Ayyapan Rajagopal, CFO Aditya Agarwal, and CBO Prahlad Krishnamurthy calling it quits last year.

Cleartrip later appointed former Swiggy executive Anuj Rathi as the CEO, and he will have a big task on his hands. While Cleartrip’s biggest competitors such as ixigo, MakeMyTrip and EaseMyTrip are profitable, the Flipkart-owned platform needs to pare down its operational costs to get closer to its rivals. 

At the moment, the situation does not look promising for Cleartrip. In FY24, the platform spent a staggering INR 524 Cr on discounts to grab the market share. 

Optimising the customer acquisition cost and reducing discounts will be the top priorities for the new CEO ahead of an IPO for the parent company. 

EKart: A Tale Of Contrasting Sides

Despite being one of the earliest ecommerce companies equipped with a logistics arm, Flipkart-owned EKart Logistics has suffered a drop in revenues by 5% to INR 12,115.3 Cr in FY24, while its losses mounted five-fold to INR 1,718.4 Cr.

Besides servicing Flipkart sellers, Ekart provides end-to-end solutions for the wholesale and retail clients of Flipkart and has partnered with brands and SMEs to fulfil their last-mile delivery requirements.

Ekart has also onboarded the government-backed ONDC network to provide logistics services to the sellers. 

The ecommerce logistics space is simmering with horizontal players like Amazon and Meesho also launching their in-house logistics support and vertical players like Shadowfax, Ecom Express and Loadshare cashing in on the quick delivery boom. 

It’s time for Ekart to plug its gaps to make the best use of the rapid strides the logistics industry is making with both quick commerce and ecommerce zooming in the fast lane.

Super.Money: Flipkart’s Latest Big Bet 

The launch of its own payments app, Super.Money, was a surprise move from Flipkart. The company has reportedly pumped $35 Mn – $40 Mn into Super.Money, helping it emerge as one of the top six UPI apps in India in December 2024, amassing 100 million transactions a month. 

Flipkart’s fintech push came as a surprise because fellow Walmart company PhonePe tops the UPI league and has a host of payment products such as insurance, stock investments and lending on its platform.

But Flipkart sees plenty of depth in the financial services and payments market, as evidenced by its recent push to acquire new users. 

Super.Money is looking to attract users by offering cashbacks and incentives for transacting on Flipkart, Myntra and other sister platforms. The strategy seems to align with Paytm, PhonePe and CRED that have also built super apps centred around UPI.

But even these giants have had a tough time scaling up with profits. Even Paytm and PhonePe with over INR 5,000 Cr in fintech revenue cannot lay claim to this landmark yet. 

Building monetisable products around UPI has turned out to be a slow-growth strategy and involves plenty of cash burn to acquire and retain users. Building profitable super app plays around UPI is therefore proving to be a bottleneck for the entire fintech ecosystem. 

The only way out is scaling up and hoping that the economies of scale come into play. 

But this will take years in the case of Flipkart, and despite building a host of platforms that could one day be linked to each other, the ecommerce giant is still struggling to get to terms with its losses. 

Profits have eluded Flipkart just as they did Amazon for almost the first decade of its existence. Having been founded in 1994, Amazon only reported its first year of profits in 2002. 

In Flipkart’s case, it’s been nearly 18 years since the company started operations. But even after nearly two decades, the company is yet to crack profits. This just shows the extent of the uphill trek for the ecommerce giant, but it cannot afford to go into a massive IPO without profits in its corner. 

That’s the Herculean task for Krishnamurthy & Co in the year ahead.

[Edited By Kumar Chatterjee]

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