The ecommerce story in India at the moment is one of heavy losses in the billions. Collectively, the four horsemen of Indian ecommerce marketplaces — Flipkart, Amazon, Snapdeal and Paytm Mall — have registered losses of INR 10,879 CR during the financial year 2018-19 (FY19) in India. This staggering amount highlights just how far off profitability the ecommerce sector in India is.
While Amazon India and Flipkart registered a net loss of INR 5685 Cr and INR 3837 Cr, Paytm Mall and Snapdeal observed losses of INR 1171 Cr and INR 186 Cr respectively. This loss-making pattern is in stark contrast to the boom expected in India’s ecommerce sector, which is estimated to be worth a whopping $120 Bn by 2020.
But when you look at the present, none of the ecommerce companies in India has achieved the numbers last year to indicate a move towards profitability. While factors such as rising smartphone penetration, the successful deployment of 4G networks, improvements in digital payments, hyperlocal logistics, analytics-driven customer engagement, digital advertisements and growing consumer wealth, ecommerce platforms have the right conditions for success.
But in terms of financial performance, none of the companies seem to be on track for profitability given last year’s numbers. A straight numerical comparison here would not do complete justice as the capital investment and market penetration of every company is different, but how do we assess who’s doing better?
