“Financial Sustainability Of Indian E-Commerce Companies: An Analytical Study ”

Abstract

The Indian E-commerce industry has witnessed rapid expansion driven by increased internet penetration, digital payments, and changing consumer behavior. Despite robust growth in revenues and market outreach, many Indian E-commerce firms continue to report persistent operating losses, raising serious concerns regarding their long-term financial sustainability. Against this backdrop, the present study examines the financial sustainability of selected Indian E-commerce companies during the financial year 2017–18, with a specific focus on revenue growth, operating performance, and capital structure dynamics. The study adopts an analytical and empirical research design using secondary data collected from company annual reports, regulatory filings, and financial databases. Key financial indicators such as revenue growth rate, operating margins, EBITDA, debt–equity ratio, and cash burn patterns are analyzed using ratio analysis, trend analysis, and regression techniques. The findings reveal that although E-commerce firms experienced substantial revenue growth during the study period, operating losses remained significant due to high customer acquisition costs, logistics expenses, and discount-driven sales strategies. The analysis further indicates a strong dependence on external funding, with equity-heavy capital structures playing a crucial role in sustaining operations. The study concludes that while growth-oriented strategies enabled market expansion, financial sustainability remained fragile during the study period. The paper offers valuable insights for policymakers, investors, and management by highlighting the need for a balanced approach between growth and profitability in India’s evolving digital economy.