Flip­kart Sheds Spend­ing Flab to Get Into Shape

As in­vestors ask hard ques­tions & go­ing gets tough, In­ter­net cos are hav­ing to change biz mod­els & tem­per val­u­a­tion hopes CEO Binny Bansal is tak­ing steps to build a self-sus­tain­ing biz to take on com­peti­tors Star­tups Cut­ting Join­ing Bonuses

The Economic Times - - Front Page -

Aditi Shri­vas­tava & Mad­hav Chan­chani

Ben­galuru: Flip­kart is rac­ing to cut ex­penses and earn a gross profit ahead of the fes­ti­val sea­son start­ing in Septem­ber, when de­mand for big dis­counts will re­new the frac­tious bat­tle to dom­i­nate the country’s on­line re­tail mar­ket.

The drive to build a self-sus­tain­ing busi­ness, be­ing led by Flip­kart’s new chief ex­ec­u­tive of­fi­cer Binny Bansal, in­cludes a se­ries of mea­sures from cap­ping salary in­cre­ments at 10% to giv­ing cat­e­gory heads six months to be­come prof­itable at a unit level.

All this while the com­pany re­duces the amount of money used to ex­pand the busi­ness — termed the burn rate — by half, ac­cord­ing to sev­eral peo­ple aware of the com­pany’s strat­egy. In­dia’s most val­ued In­ter­net com­pany look­ing to bring down burn rate by Co look­ing to cut burn by cap­ping ap­praisals, fo­cussing on cat­e­gories that do well and shut­ting down those that don’t meet cus­tomer ex­pe­ri­ence and prof­itabil­ity tar­gets Slow­ing fund­ing and con­cerns over val­u­a­tion are forc­ing In­dian star­tups to cut join­ing bonuses, re­port Anu­meha Chaturvedi & Rica Bhat­tacharyya.

more than 50% to $40 mil­lion/ month

ED first sum­moned Mallya to ap­pear on March 18 and set a fresh date of April 2 af­ter he sought more time. The busi­ness­man again sought time till May but the agency ex­tended the dead­line only by a week to April 9.

Mallya, in his com­mu­ni­ca­tion to the agency, claimed that he has al­ready given state­ments to the Cen­tral Bureau of In­ves­ti­ga­tion and the Se­ri­ous Fraud In­ves­ti­ga­tion Of­fice. He also cited on­go­ing le­gal pro­ceed­ings in the SC on a set­tle­ment of loans, a se­nior of­fi­cial said, re­quest­ing anonymity.

ED ruled out the pos­si­bil­ity of Mallya’s ap­pear­ance through video con­fer­enc­ing. “The sum­mons is­sued un­der money laun­der­ing charges asked for per­sonal ap­pear­ance and not dis­tant ap­pear­ance. The state- ment given by a sus­pect needs to be signed by him, with­out which it can­not be sub­mit­ted to the court af­ter in­ves­ti­ga­tions,” added an of­fi­cial. On the re­quest for re­vo­ca­tion of the diplo­matic pass­port, au­thor­i­ta­tive sources told ET they want a proper direc­tive and ad­di­tional steps are be­ing taken in con­sul­ta­tion with ED and the De­part­ment of Le­gal Af­fairs to make a fool-proof case to avoid em­bar­rass­ment. MEA had re­voked Lalit Modi’s pass­port on ED’s direc­tive. Modi got his pass­port re­stored by the Delhi HC in Au­gust 2014 on the grounds that his per­sonal ap­pear­ance was not manda­tory un­der the For­eign Ex­change Man­age­ment Act, the show-cause no­tice is­sued to him was still pend­ing with the ad­ju­di­cat­ing au­thor­ity and no penalty had been levied.

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