Flipkart India Registered 19% Jump In Its Revenues For The Last Financial Year
Even as the Flipkart Group tries to figure out the legal and other details of its deal with Walmart and Indian industry assesses its impact on the ecosystem, Flipkart India, the wholesale arm of Flipkart, has cut down its losses by 55% in FY17 as compared to the previous fiscal.
According to ministry of corporate affairs (MCA) filings, the company reported a net loss of $36 Mn (INR 244 Cr) for FY17, a 55% slump from its $80.3 Mn (INR 544.5 Cr) during the previous fiscal.
However, the online retailer’s total expenses shot up by 15% from $2 Bn (INR 13,722 Cr) during FY16 to $2.33 Bn (INR 15,813 Cr). Also, in FY17, its revenues grew 19% by registering $2.35 Bn (INR15,264 Cr) compared to $1.89 Bn (INR 12,818 Cr) in the previous year.
As an entity, Flipkart registered a 29% YoY increase in its revenue, at a staggering amount of $3.09 Bn (INR 19,854 Cr) for the financial year ended March 2017. However, Flipkart continued to record high losses, which reached $1.3 Bn (INR 8,771 Cr), translating into an increase of 68% from the FY16 loss of $814 Mn (INR 5,223 Cr).
Ecommerce firms like Flipkart and Amazon use their wholesale units as distribution agencies, which directly source products from brands across the world and then have third-party merchants sell it on their platforms.
Amazon Wholesale India, Amazon’s Indian wholesale distributor, increased its turnover by 2,700 times in FY16-17, recording $1.08 Bn (INR 7000 Cr) worth sales in FY 16-17.
In January, Amazon infused $306 Mn (INR 1,950 Cr) funding in its Indian arm, Amazon Seller Services. With this, the overall capital infusion in Amazon Seller Services touched $1.3 Bn (INR 8,150 Cr) for FY18.
Keeping with the company’s commitment to its Indian business, Amazon India reported over 105% growth in revenue in FY17. According to its regulatory filings, Amazon Seller Services posted a 41% increase in earnings to $485.4 Mn (INR 3,128 Cr) during the said period.
The opportunity in Indian ecommerce is big. According to a report by Forrester Research, online retail sales in India will reach $64 Bn by 2021, growing at a five-year compound annual growth rate (CAGR) of 31.2%.
India’s ecommerce industry is expected to touch $200 Bn by 2026, as per a report by Morgan Stanley. The market reached $33 Bn registering a 19.1% growth in 2016-2017, according to the Indian government’s Economic Survey 2018.
With global retailer Walmart buying a 77% stake in Flipkart for $16 Bn, the company’s next target is offline expansion. With Flipkart India recovering from its staggering losses, the wholesale arm of Flipkart looks promising support for Walmart’s plans in India.
