In the Indian ecommerce race, the lead keeps changing every quarter. On some days, it is the home-grown unicorn Flipkart that leads the race, and on some days it’s the US ecommerce giant Amazon that is ahead.
In the fiscal year 2015-2016, Amazon India performed better than Flipkart. Amazon Seller Services’ revenue more than doubled (116%) in FY 16, with Rs 2,217 crore revenue collection. This revenue was earned through commissions, advertisements and shipping fees paid by sellers on its marketplace platform.
Flipkart Internet Pvt. Ltd’s revenue increased by 153% in FY 2015-16, which is higher than Amazon’s percentage increase of 116%. But the total revenue figure of the American etailer (Rs 2,217 crore) is more than Flipkart’s figure of Rs. Rs 1,952 crore.
Determining the actual revenue of both the marketplaces is difficult because of their complex business structures. The above revenue figures are just of the two units, Amazon Seller Services and Flipkart Internet Pvt. Ltd and it includes income from only few of its revenue sources.
Flipkart has been plagued by a series of problems like devaluations and high-profile exits. This is making it difficult for the Indian etailer to raise funds. On the other hand, Amazon has billions of dollars on the side to spend on its India unit.
Harminder Sahni, Wazir Advisors’ founder said,
“Flipkart will have a tough time going forward in terms of funding as well as competing with Amazon.”
While the ecommerce biggies’ revenue more than doubled, the losses too increased manifold. In FY 2016, Flipkart reported a loss of Rs. 2,306 crore. And many believe that Amazon’s loss figure would touch $1 billion by the end of FY 2016-17.
This high loss figure is due to the ‘no expenses spared’ attitude of the etailers. As a result, there is a wide gap between the revenue and their expenses.
“Given the potential of the market, the numbers are still not huge and the pace of growth has come down. Even within the overall organised retail market, their contribution is just a fraction despite spending aggressively to gain market share,” said Sahni.
Let’s hope that the revenue figures of FY 2016-2017 are better than the previous fiscal years for Flipkart, Amazon and other ecommerce players.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
Leave a Comment
