Why have major E-commerce websites in India been running in deficits ?

The Indian E-commerce market is primarily dominated by Amazon.in and flipkart who constitute nearly 90% of the market share, these firms entered the Indian e-commerce space back in 2012 and 2007 respectively and since then they have done business amounting to billions but they are still in deficit i.e they are still in loss in-spite of the hike in there revenues ,this is primarily because of the strategies adopted by these firms , for flipkart and amazon making continuous losses is a
conscious decision. In an interview one of the flipkart’s promoter said that “Profitability is not a focus area .It’s a strategic decision. We can be profitable from today if we want . we can stop investing in one area and start making profits; it’s definitely possible, but we don’t want to remain as a small profitable company.” This statement clearly shows the money guzzler strategy adopted by these firms where they burn the investments which they have received from venture capitalist and investors by providing customers heavy discounts and doing serious expenditures on advertisement and digital
marketing.

The sole purpose of offering such discounts and doing such advertisements is to expand the consumer base, these firms are basically eyeing on the profit of long term rather than of short term for example amazon.us was operating under loss for more than a decade but in this period it has expanded its customer base to all possible corners of U.S.A and it is now that they have actually started earning profits. The same model has been adopted in India and as a resultant flipkart had a loss of 3200 crore for the fiscal year 2018 and amazon.in had to face an loss of 6290 crore – close to a billion for the fiscal year 2018.when we take into account the aggregate of these facts and figures it becomes clear that the major e-commerce websites in India have been running in deficits by choice and not by market conditions or any other factors.