Showing posts with label E-books. Show all posts
Showing posts with label E-books. Show all posts

January 13, 2012

Flipkart


Flipkart was the person of the year for book-lovers in 2011 and they are doing great service by delivering books at your doorstep and even offer cash on delivery for those who dont use internet or wary of netbanking. But how long will they bleed? Two things are going against them. A tirade against them by the publishers and a backout by Amazon - the big boys of books. Second thing first, Amazon ha...s now categorically denied any interest in buying flipkart or infibeam in India - they will enter on their own. This means, flipkart will now have to manage on their own despite a One Billion dollar valuation. They have hired their own courier, outsourced cash on delivery, and branched out into mofussil and non-metro locations in the scramble to get volumes that will interest buyers. Lastly, to talk about the tirade by publishers - a few weeks back, all the publishers from Hachette and Random House to Rupa etc. have summoned the owners of flipkart to stop bleeding them and retailers by giving discounts upto 35 per cent. In some cases, the publishers are giving 35 pc discount to Flipkart while they in turn pass on 40 pc discount. Nobody is complaining because the book-buyers are benefiting. But there has to be a sustainable model - and book distribution is not such a lucrative business. While there is boom on one side, there is gloom at the retail side - which I will address separately. Thats a little update on flipkart. In Hyderabad, they do now average 2500 deliveries a day. But sustainability and cash flows will sooner or later be called into question. Thats the point any PE Investor or Suitor will ask. As far as I know, close to Rs.4000 crores of receivables is getting stuck in Educational Institutions who order books but dont have money to pay - I am talking about the Engineering/Technical Institutions who are seeing a massive payment crisis which is actually a scam in disguise. Those who wish to know can PM'me...

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