Whatsapp Message Destroys 71% of Indian E-commerce Firm’s Value – India Whatsapp Indiatrivedibloomberg

India Whatsapp Indiatrivedibloomberg – It’s been clear for some time now that Indians have been abandoning their e-commerce app and flocking to WhatsApp. So, it was only a matter of time before the major players started feeling the pinch.

India’s largest e-commerce firm Flipkart has finally admitted that its stock is tanking, thanks to messaging apps like WhatsApp and WeChat.

A report by China Times, cited in a report by Bloomberg, says that the country’s largest e-commerce player has been seeing its stocks drop significantly in recent months. An executive with a market research firm who spoke with Business Insider said that the company had lost 20% of its value since February.

Flipkart was known for offering great discounts and shopping perks when it first started out. But, it has been hit by losses recently, which is really bad news for the company.

One of the factors that’s causing Flipkart’s stock value to fall is WhatsApp. The most popular messaging app in India, WhatsApp has a whopping 419 million monthly active users. In June, this number was close to 135 million users.

The steep decline in user growth is due to a tight merger that Facebook and Google had with the Indian government earlier this year. Apparently, this has limited the amount of user data that can be collected.

This could be one of the reasons why e-commerce users have been looking at other options for their online shopping needs. There’s also plenty of food delivery apps like Zomato available on which people can order meals.

The Chinese messaging app WeChat is also very popular in India since its launch in 2014, due to its numerous games and interactive features.

“The valuation story was not (rooted) in fundamentals,” said Jayanth Kolla, founder and partner at Convergence Catalyst, a venture capital research firm. “Now the e-commerce company needs to find its own reason for being.”

Flipkart’s move to put its focus on growing via mobile devices is a good one. But it remains to be seen if it can regain the confidence of investors by doing so.

According to Morgan Stanley, Flipkart’s USP was its “offline business model” that allowed it to undercut Amazon. But this advantage isn’t there anymore since Amazon is also expanding into the offline market.

The pressure that the company is under is likely due to the fact that it recently raised $1 billion from investors. These investors have been pushing for Flipkart to go public since the last few months.

“Flipkart is moving away from its original DNA. It was supposed to be an online-only company, and it had deep pockets,” said Sanchit Vir Gogia, chief analyst at Greyhound Research. “Now, investors are concerned about the fact that it is spending a lot on marketing.”

The latest news about Amazon’s foray into the offline market will only feed into these concerns. “The move only validates Flipkart’s fear,” Gogia added.

Thanks to WeChat, WhatsApp and other messaging apps crippling Flipkart’s business, the company’s value has fallen from $15 billion to $8 billion. This is a huge fall for the company that was once valued at $15 billion.

“E-commerce is getting overcrowded in India, and there is increasing market share fragmentation,” said Kolla.