Flipkart Ecommerce Arm’s Loss Up 1.5X To INR 4,361 Cr In FY22

Walmart-backed Flipkart’s marketplace arm, Flipkart Internet, saw its standalone net loss surge 1.5X to INR 4,361 Cr in the financial year ending March 31, 2022 from INR 2,881.3 Cr in financial year 2020-21 (FY21). 

The Bengaluru-based company’s total income rose 31% to INR 10,659 Cr in FY22 from INR 8,115 Cr in FY21, while expenses also jumped to INR 15,020.8 Cr from INR 10,996.3 Cr in FY21. 

Riding on the surge in online shopping during the year, SoftBank-backed Flipkart Internet saw its total revenue from operations increase 33% to INR 10,476.7 Cr from INR 7,840.4 Cr in FY21. It earned INR 10,059.9 Cr through sales of services, whereas other operating revenue stood at INR 416.8 Cr. 

While Flipkart Internet primarily earns through its ecommerce marketplace, information technology-enabled services and support services, including corporate agent services for insurance companies, further add to its revenue.

Expenses Under Lens

Flipkart Internet’s total expenses rose 36.5% to INR 15,020.8 Cr. Employee benefit expenses stood at INR 3,735.2 Cr, an increase of 18% from INR 3,163.4 Cr in FY21. 

Employee benefit expenses usually comprise employee salaries, PF contributions, gratuity, and other employee welfare benefits. A surge in employee benefit expenses is an indication of the startup increasing its employee headcount. 

Flipkart Internet spent a whopping INR 1,945.9 Cr on advertisement and promotional activities, a noticeable jump from INR 1,073.4 Cr in FY21. Transportation cost rose 46.5% to INR 5,045.5 Cr from INR 3,443.6 Cr in the previous year. The startup’s EBITDA loss increased to INR -3,925.1 Cr in FY22 from INR -2, 226.7 Cr in FY21.

Talking about unit economics, Flipkart Internet spent INR 1.4 to earn INR 1 during the financial year 2021-2022. 

Earlier this year, Walmart International CEO and President Judith McKenna said she was confident that Flipkart would hit profitability. The ecommerce giant will further go for an IPO ‘when the time is right’, she said.

“And when the time is right will depend on a number of factors, not least the market, but also the business performance,” McKenna added. 

Flipkart had last raised $3.6 Bn from GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2 and Walmart at a valuation of around $38 Bn. Earlier this week, reports said that Walmart would raise $3 Bn for Flipkart, which will value the latter at $40 Bn. 

Flipkart has been on an acquisition spree over the last two years. It acquired Cleartrip, Sasta Sundar, and ANS Ecommerce, and also made investments in agritech startup NinjaCart and courier services startup Shadowfax. 

As per an Inc42 report, Indian ecommerce startups raised the highest funding amount worth $30 Bn across 1.3K deals between 2014 and first half of 2022. The sector’s size is estimated to reach $400 Bn by 2025. 

Flipkart and Amazon currently dominate the Indian ecommerce space.

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