It is losses galore in the Indian ecommerce industry as the gap between revenue and loss is widening with each passing year.
Right from ecommerce leaders Flipkart & Amazon, online grocer Grofer, ecommerce-focused logistics firm Ecom Express to Snapdeal’s investor Softbank, the losses for FY16 has broken all previous records.
Online grocery leader BigBasket and Flipkart’s logistics arm Ekart are latest to join the list.
In the last financial year, the company’s revenue increased by 3X. It went from Rs 170 crore in FY15 to Rs 563 crore in FY16. However, the three-fold revenue growth is no match to the four-fold hike in losses. BigBasket’s loss increased from Rs 61 crore in FY15 to Rs 277 crore in FY16. Heavy investment in technology, marketing activities and expansion strategies led to the e-grocer’s losses.
But BigBasket’s co-founder Vipul Parekh is positive about his company’s growth. He said,
“In the past year alone, we have seen over 300% growth and continue to grow by 10% on a month-on-month basis. We hope to triple revenues to Rs 2,000 crore by March 2017.”
Flipkart’s logistics unit Ekart managed to accumulate a whopping loss of Rs. 810 crore in only 9 months of its operations. Set up in June 2015, it earned revenue of Rs 303 crore compared to Rs. 800+ crore losses.
This is over and above Flipkart India and Flipkart Internet’s collective loss of Rs 2,850 crore in FY 2015-16.
While talking about Ekart, a company insider revealed,
“The company is talking to a lot of third party clients. In 2017, their main aim is to make it sustainable. Right now, it is eating into Flipkart’s revenues. A lot of internal fine-tuning is happening at the moment. The company plans to generate at least 50 per cent of the business from external clients in the next two years. Right now, it is just around 10 per cent.”
Ekart’s online C2C courier service failed to gain traction, because of which they recently relaunched it as an offline service. In the meanwhile, Flipkart has committed to invest $2.5 billion in Ekart in the next few years.
In the future, would Ekart contribute to Flipkart’s revenue or losses? Would it turn out to be a boon or a bane?
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
