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Investor Haresh Chawla's Blogpost Against Flipkart Trends on Twitter

The Indian startup ecosystem was abuzz on Monday following a blog post by investor Haresh Chawla and his sensational take on Flipkart.

Published: 26th April 2016 06:45 AM  |   Last Updated: 26th April 2016 07:16 AM   |  A+A-

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BENGALURU/CHENNAI:The Indian startup ecosystem was abuzz on Monday following a blog post by investor Haresh Chawla and his sensational take on Flipkart.

According to him, Flipkart seems to be in the middle of a crisis of its own making characterised by stalled growth compounded by management churn and the imminent possibility that it will cede the top slot to Amazon. He was quick to add though, “But it’s not too late to change its strategy.”

Fellow investors and enterpreneurs took to Twitter to either agree or disagree. Flipkart, the posterboy for Indian ecommerce industry, retorted in its inimitable style by just tweeting a picture of John Snow, the protagonist in the popular television series Game of Thrones with a caption — Thankfully, our returns are never uncertain — to boot.

While entreprenuer Sumanth Raghavendran was quick enough to give a rebuttal of sorts on why Chawla was wrong, extending support to Flipkart, investor-cum-entreprenuer Rajesh Sawhney tweeted: “Unfortunate that Flipkart bashing has become fashionable w Bloggers & PE managers who missed the boat.”

The Indian e-commerce sector has been under the scanner with concerns over sky-high valuations amid continuous losses. Making things worse, the gross merchandise value, based on which these companies are valuing themselves, lost the momentum. “Mark-downs and downrounds (where investors buy a company’s stock at a lower valuation than in previous rounds of funding) are part of every discussion about Flipkart and the future of Indian e-commerce firms.

“Too much time is spent discussing Flipkart’s valuation. Is it worth $5 billion or $15 billion...But everybody is barking up the wrong tree,” noted Chawla, who’s IVFA has over $1.5 billion under management.

He blames Flipkart for being caught up in the middle of a storm which is of its own making. It’s faced with a significant management churn at the top. According to Chawla, Flipkart lost its mojo, thanks to Amazon, which is scaling up pretty fast. “While Flipkart is the market leader, but Amazon is snipping at its heels and Flipkart has no clue which way to go,” he said adding, “Flipkart was the toast of the Indian internet market and could do no wrong. How did things come to such a pass?

Over half of Flipkart’s GMV comes from selling smartphones - just the Moto series from Motorola is estimated to be worth half a billion dollars. Flipkart focused on just that to the exclusion of everything else. Amazon is now attacking this Achilles heel and is just months away from beating Flipkart to the No 1 position.

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