Flipkart, the Indian eCommerce giant, has seen Morgan Stanley Investment Management Fund cut the valuation of its holdings in the company by 38 percent due to increased competition from Amazon.
According to The Wall Street Journal, which cited a Securities and Exchange Commission filing for the quarter that ended on Sept. 30, Morgan Stanley Select Dimensions Investment Series said its position in the company is 1,969 shares valued at $102,644, or $52.13 a share. For the quarter ended June 30, the investment fund held the same number of shares, but they were valued at $165,967, or $84.29 a share.
A Flipkart spokesman told WSJ the reduction in value on the part of Morgan Stanley is a “purely theoretical exercise” that is “not based on any real transactions.”
The move on the part of Morgan Stanley comes at a time when there are real questions about competition from Amazon. In August, reports by Livemint implied Flipkart seems on the verge of being displaced as India’s top eCommerce firm. In an experience that has become a bit common the world over, Amazon has swept into town and (as only a mentor/arch-rival can) disrupted Flipkart’s hold. Three years into operations in India, Amazon pushed past Flipkart in terms of gross sales for the month of July.
Flipkart reported gross sales or gross merchandise value (GMV) of less than ₹2,000 crore in July, while Amazon’s gross sales crept up above ₹2,000 crore, according to “people familiar with the companies’ numbers.” Gross sales measure the value of goods sold on the site and do not necessarily track revenue. Flipkart’s figures also do not include revenue at Myntra and Jabong — two of the larger fashion retailers it owns. Including Myntra and Jabong revenues, Flipkart is still comfortably ahead of Amazon.
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