Latest to join the list is Paytm that recorded a loss of Rs. 372 crore in FY15.
From a profit making venture to a loss making one
In FY2014, Paytm had made a profit of over Rs. 5 crore. But after it transformed into an ecommerce portal from an online recharge & payments company, the company has reported a loss of Rs. 372 crore according to its filings with the Registrar of Companies.
- Revenue increased to Rs 336 crore in 2014-15 from Rs 210 crore in 2013-14
- Expenses increased to Rs 697 crore in FY15 from Rs 200 crore in FY14
- 12-fold increase in advertising & marketing expenses
Shopclues is the least loss making online marketplace
While on the one hand ecommerce biggies Flipkart, Amazon, Snapdeal are accumulating huge Rs. 1000 crore+ losses, on the other Gurgaon based online marketplace Shopclues’ FY15 loss is Rs. 100 crore, the least of all.
“We have toppled Flipkart, Snapdeal and Amazon India. Also, we are the top player in the Tier-II and Tier-III cities, as 70 per cent of the business comes from there… Our capital raise to value generation ratio is the best,” said Shopclues’ CEO Sanjay Sethi.
The founder believes that as the company has highest number of sellers, maximum stock keeping units (SKUs), and no pointless fundraising sessions & mindless spends, it has led to this growth. Sethi also called Shopclues ‘the first Indian pure play e-commerce company to turn profitable.’
Crores of losses, still ecommerce is India’s fastest growing industry
In spite of these heavy loss figures, the ecommerce industry is growing from strength-to-strength and will continue to do so. What needs to change or will eventually change is online marketplaces’ cash burning activities.
Ecommerce players are already focusing on revenue generating sectors such as advertising and marketing services. They are also trying to get rid of discount driven model by introducing online only products/brands and improving their respective mobile platform to enhance buyers’ shopping experience. Let’s hope that FY2015-16 brings good news for Indian online marketplaces.