In the last round of funding it raised, this May, India's largest online retailer was valued at $2.

5
billion (about Rs 15,000 crore). And, as ET reported last week, Flipkart is now lining up its
biggest round of fund-raising as a precursor to a possible American listing, and this time the
valuation figure doing the rounds is $5 billion (Rs 30,000 crore).
If Flipkart manages that valuation, by itself, that would be a stunning double. It would be even
more stunning when compared to all that surrounds it. There is no comparison, especially in the
brickand-mortal world.
Here, Future Retail was India's first organized retailer, set up in 1994. This Kishore Biyani
company, whose flagship is Big Bazaar, has a product span that matches, if not betters, Flipkart's.
As of March 2014, Future had 319 stores in 98 cities and towns, whereas Flipkart had six
warehouses and zero stores. Future's revenues were about two times and its assets 23 times that
of Flipkart. Future is profitable, whereas Flipkart is yet to post a profit.
Yet, at $5 billion, the company set up by Binny Bansal and Sachin Bansal (no relation) in 2007
would be 10.6 times more valuable than the operation that Biyani has assembled. "Investors look
at the future," explains Rachna Nath, leader, retail & consumer, PricewaterhouseCoopers. "Is
there scalability in the business? Does it disrupt existing systems and processes? Here, online
sellers score over offline retailers, and are valued more."

Flipkart building a team to assure that future sales do not see Big Billion Day sale-like
technical failure
Even though the Big Billion Day bought massive revenue to Flipkart, it also attracted
miffed retailers, electronic giants and government authorities who weighed in heavily on the
predatory pricing on that day.
To make matters worse, the site was functioning at its worst best and bought along enough
negative social chatter to force the founders to write an apology letter to all its customers. Now,
in order to assure that such glitches do not be a part of their future sales, Livemint reports that
Flipkart is strengthening its quality assurance team and considering working with companies that
provide cloud-based solutions to handle massive traffic increases on days when it has a sale on.

The company is now building a large quality assurance and systems testing team under Srivalli
Arkalgud, who was hired from software maker Intuit two months ago. This teams sole
responsibility is to test the strength and quality of programming code written by Flipkart
engineers for the site. The company is also working with Googles cloud services team to see if it

can move its storage management on such days when its servers may not be able to handle
increase in traffic.
The whole catastrophe on October 6 was unprecedented and even though preventive steps were
taken, the traffic was beyond expectation. It is completely incorrect that there were warnings
that were ignored. We had contingency plans in place for addressing these issues with stress
testing to identify the potential failure points. But, as Sachin mentioned in his email to customers
post the billion day sale, the traffic on that day ended up being much higher than what we had
anticipated in all scenarios, Flipkart spokesperson told the publication via email.
Meanwhile, the sources further stated that the company is seeing its biggest management churn
in 18 months with as many as five senior executives leaving the company since September.
Kalyan Krishnamurthy, senior vice-president, retail; Nipun Mehra, senior director, retail; Suraju
Dutta, vice-president, supply chain strategy; Siddharth Das, chief operating officer of Flipkarts
now defunct payment system PayZippy; and Dharmarajan K., senior director, customer service,
have all left Flipkart.

Future of Flipkart and Myntra merger

Following their recent merger, e-commerce companies Flipkart and Myntra are acquiring and
incubating private labels to increase their fashion business. The combined entity is also roping in
more international brands and Bollywood celebrities, while increasing the seller base.
It is eyeing a share of about 65 per cent of the online fashion segment in the next 12-18 months.
It claims it accounts for half the current market share. Myntra has eight private labels, and it is
expected the count might double in a year, though the company did not officially provide any
estimate.
he combined entitys growth strategy was a tricky issue, as Flipkart and Myntra had separate
brand identities. Both continue to have separate portals and brand strategies, at times contrasting
each other. While Flipkart recently tied up with small and medium retailers to bring an affordable
assortment of fashion products online through local retailers, Myntra is focused on high-street.
But market analysis indicates that there is absolutely no chance or thought that Flipkart or
Myntra will merge as a single brand in the coming times. Flipkart will have a broad catalogue,
including that of Myntra, while Myntra will continue to position itself as fashion curator. The
merger has happened at the shareholder level, with no change in the experience of the consumer.
To build a position of an online fashion curator is difficult and it seems neither wants to take a

step they can't go back on. Also, there is suspicion of contamination and losing distinction as
brand identities. They are yet to arrive on an understanding of what the Flipkart-Myntra brand
will be about.