To stay ahead in the race, Flipkart lost Rs 14 crore per day in FY16

In order to remain ahead of its arch rival Amazon, Flipkart ran up daily losses of over Rs 14 crore in the last financial year.

The Bengaluru-based company, which has been spending aggressively to attract talent and customers thereby increasing losses, was successful in boosting revenue to Rs 15,403 crore in fiscal 2016, according to filings made by Flipkart's holding company registered in Singapore.

Reportedly, the filings indicated that the company experienced slower revenue growth and deteriorating margins in 2015-16. In contrast, during fiscal 2015 Flipkart, which posted revenue of Rs 10,245 crore, had trimmed negative margins to 25 per cent. The higher cost of retaining talent - including salaries and stock-based compensation that shot up by 124 per cent to Rs 1,880 crore - as well as business promotion expenses that doubled to aboutRs1,100 crore, drove a large part of the losses.

However, the online retailer - which was estimated to be worth $15 billion in its last funding round in 2015 - has said that it has cut down losses since the beginning of the current financial year and is back on a growth track.

"We will be getting into fiscal year 2018 with a growth tailwind. By March 2017, the company will have cut burn rate by 50 per cent,” Flipkart CEO Binny Bansal told ET.

The turnaround is expected to be driven by greater profitability in its key fashion business, including from its subsidiary Myntra and a few other high-value segments such as large appliances. Besides online retail, Flipkart also runs a logistics business through Ekart, as well as a digital payments business under the brand, PhonePe.

India's online industry, which is expected to be worth $60 billion by 2020 according to a Google-AT Kearney study, is dominated by three large digital marketplaces - Flipkart, Amazon and the Softbank-backed Snapdeal.

Amazon, on the other hand posted losses of Rs 3,571 crore, according to regulatory filings by its main India unit - Amazon Seller Services - in fiscal 2016.

The American company also operates through a number of other units like Amazon Transportation Services and Amazon Wholesale, but a large majority of its investments are routed through this unit. Experts reckon that in the current financial year, Amazon has sharply increased its spending.

"The odds are against it (Flipkart) because Amazon can afford to lose more than it can,” Vivek Wadhwa, a fellow at Carnegie Mellon University, told ET.

"This isn't a fair match because the Western adversary is dumping billions of dollars into the Indian market in its attempt to create the same monopoly there as it has in the US,” Wadhwa told ET.

As of March 2016, Flipkart had Rs 4,100 crore as 'cash in hand' and another Rs 5,081 crore as investment in mutual funds/bonds under 'available for sale' investments, giving it a runway of about two years at the current burn rate.