Flipkart‘s losses might be on the rise but that is not stopping the Indian e-commerce giant from upping its game against Amazon in the country. The company is reportedly looking at making big investments in technology startups from Silicon Valley to strengthen its foothold in India. Also Read - Massive Rs 2,000 flat discount on Xiaomi Mi 11X: Check the mouth-watering deal on AmazonAlso Read - Amazon Great Freedom Festival sale to kick off on August 5: Deals, discounts and offers
With eyes set on investments over $25 million (approximately Rs 2.5 crore) in at least one artificial intelligence startup, Flipkart wants to bring technology capabilities in the country which are currently unavailable. Sources told ET, “They (Flipkart) are looking at tech acquisitions in the valley because differentiated tech is a new focus area for the company,” adding, “The idea is to bring these Indian tech founders from the US who can bring deep technology capabilities that don’t exist in India.” Also Read - Infinix Smart 5A launched in India with a competitive introductory price: Details here
Artificial intelligence is one of the newest global technology trends with applications including e-commerce. With AI, search algorithms can be improved thereby enhancing the consumer experience while shopping online. According to the sources, Flipkart currently lags in terms of technology by almost 4-5 years. “Even as of 2015, Flipkart’s catalog management system was broken. The search is still broken,” one of the sources is quoted as saying in the report. Amazon, on the other hand, has a much more advanced technology division globally, making sure multiple services are up and running when the business requirements arise.
In December last year, Flipkart co-founder and chairman Sachin Bansal announced that the company will be investing “hundreds of millions of dollars” in AI technology over the next few years. He told Livemint in an interview, “This is the next big thing for us, where we are betting big on the use of AI and machine learning to solve problems at Flipkart.” He further highlighted that in India, the application of AI needs to be unique as compared to the developed countries, where focus areas are different.
Bansal further indicated that the company had already started working in the direction to push AI in the country by recruiting AI professionals, building infrastructure, and entering into hardware partnerships. In a separate report, it was indicated that Microsoft invested $200 million to help Flipkart target its customers more effectively during large-scale sale events with the use of AI technology.
As Flipkart continues to spend heavily to battle American rival Amazon in the home country, its losses mounted by 68 percent to Rs 8,771 crore in the financial year ending March 2017. According to the regulatory filings made by the online retailer s parent company in Singapore, while revenues rose by 29 percent to Rs 19,854 crore, losses increased on the back of its falling valuation. In FY17, Flipkart spent more on the advertisement and business promotion by 9.4 percent to Rs 1,188 crore, as compared to Rs 1,086 crore in FY16. It also spent more on its employees by 9 percent to Rs 2,052 crore in the given period.