Daily Pulse India: Chennai Is Paralyzed, Eros’ Latest Headache, Some Numbers From Flipkart

Namma Chennai: India’s southernmost metropolis has been submerged for nearly a month as record-breaking rains and an inefficient drainage system has brought the city to standstill. The airport has been shut for the rest of the week and many parts of the city are under 6-8 feet of water. The Hindu, south India’s inconic newspaper, didn’t publish an edition for the first time since it was set up 1878. And it’s not over yet, as the next four days are expected to be just as bad.

Social media rose to the occasion as always with user tweeting support, services and numbers. Startups have rallied around this time too. Ola, which had launched Ola Boats a few days ago has created safety zones for stranded citizens to seek shelter, Uber is offering free rides, grocery store BigBasket has created a microsite where users can donate groceries to the needy, while Housejoy is offering free household services, PayTm is offering free talk time as is Bharti Airtel and Zomato is allowing its users to order meals for Chennai friends. Of course, the bigger issue of companies and citizens having to fix what the administration couldn’t can be debated on another day.

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Flipkart’s numbers: If you’ve wondered whether the e-commerce companies are making money, here are some answers for you. In the year that ended March, Flipkart made a loss of 20 billion rupees, about a fifth of its sales for the year. According to its filing with the registrar of companies, both the loss and sales have tripled from the previous year. The target for this year is a six-fold rise in sales to $10 billion. While the numbers offer some clarity on the size and scope of India’s favorite startup, there are no real surprises here. The deep discount game that Flipkart and co are playing isn’t helping profitability, and that may not even be the focus at the moment. After all, Amazon is still swinging between profit and loss.

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Budget blues: The budget hotels segment is getting crowded with travel aggregators joining the fray and the early mover in this business are feeling the heat. In a sign that that’s the latest industry to witness consolidation, Oyo Rooms has offered to buy out Zo Rooms, which is in a desperate hunt for funds. Industry watchers believe that this is another of the Ola-TaxiForSure and Flipkart-Myntra deal, which is driven by the investors in these companies and is kind of a precursor condition for further funding. Oyo is backed by Softbank, Sequoia and Lightspeed Ventures, while Zo has Tiger Global as a backer. MakeMyTrip, Yatra and other ticketing platforms that are now offering similar services had taken Oyo and Zo off their platforms, which hit them badly.

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Funding news: Online grocery store BigBasket is about to close a $120 million funding round, with a valuation of $320 million, as it seeks to fight off new entrants into the hyperlocal grocer delivery business.

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Moving away from startups now. Volkswagen troubles in India are just beginning. Following the ARAI order to recall and fix 323,000 cars in India, the German automaker may be fined 320 million rupees for what it called a “well-thought out crime”

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Movie woes: Eros, the Bollywood movie producer and distributor, is in trouble again. Weeks after its share price on NYSE took a beating amid speculation of misreporting of financials, the company has been slapped with a class action suit by investors. The lawsuit alleges overstating of numbers and lack of adequate financial controls.

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Cover Image: Indian rescue personnel and police officials paddle an inflatable boat through floodwaters as they evacuate residents in Chennai. Thousands of rescuers carrying diving equipment, inflatable boats and medical equipment have been battling to evacuate victims. 

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