India's hottest new companies are busy losing money by the fistfuls, even as they continue to grow
Have you ever seen a kirana shop owner whose store does brisk business but loses money month after month, and for years? Unlikely, because after a couple of years he would have shut shop and tried another business. Yet, that’s exactly what is happening with the e-commerce business in India. Indeed, the flip flops over Flipkart’s recent valuation markdowns, mask a very dangerous precedent that is in the making. An entire generation of new businesses in India is being built on a model that defies gravity: India’s hottest new companies are busy losing money by the fistfuls, even as they continue to grow.