Numbers about the rise in sales on marketplaces and the growth of ecommerce in general are thrown all around in the ecommerce space. The potential product categories and potential customer markets are talked about. The challenges faced by them are talked about. Complaints and customer service issues are debated on.
But what about the fact that losses still continue? That too, despite all the billion dollar investments and funding.
It’s no secret that the three giants – Amazon, Flipkart and Snapdeal – each fighting for its own share of dominance, currently dominate the online retailing world. Each has raised funding or commitments amounting to $1 billion, which is being used for marketing campaigns and promotions to attract as many customers as possible.
But it boils down to the losses
We all know they are losing money but the amount of money may not be common knowledge.
Figures are in INR crore
Revenue figures in the above graph do not indicate GMV (price of products sold). Revenues of marketplaces indicate the commissions from sellers and listing fees applicable for listing products on their platforms.
GMV is the price of products sold and net revenue is a fraction of that.
The revenue race has Flipkart in the lead with Rs 179 crores, followed by Amazon with Rs 168.9 crore and Snapdeal with Rs 154.11 crore.
But in the losses race, Flipkart is way ahead of the other two with Rs 400 crore being blown out of their pockets. At a lesser margin than the margin of difference in the case of revenue, Amazon has incurred Rs 321.3 crore and Snapdeal Rs 264.6 crore.
The graph above indicates the loss against each Rupee revenue earned. Flipkart is losing Rs 2.23 for every Rupee earned, higher than Amazon’s Rs 1.90 and Snapdeal’s Rs 1.72.
If this continues, how long can they survive? Would be interesting to know their plan B, don’t you think?