WS Retail, among the top sellers on Flipkart’s platform, reported a 33% rise in revenues in 2015-16 to R13,566 crore, according to a company filing with the registrar of companies.
The turnover dwarfs that of offline retailers such as Shoppers Stop, which posted net sales of R4,582 crore in FY16, and is also way higher than the sales of Trent and Future Lifestyle. Cloudtail — among the biggest vendors on Amazon India — turned in sales of R4,587 crore last fiscal.
The growth of these vendors might slow following a new set of rules issued by the government for foreign direct investment in e-commerce marketplaces. In March 2016, the Department for Industrial Policy and Promotion stipulated an e-commerce entity should not permit more than 25% of its sales on the marketplace to be derived from a single vendor or a group company.
Until a couple of years ago, these vendors are believed to have contributed more than half the sales of their respective platforms.
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While WS Retail reported a profit of Rs 5.22 crore in FY16, Cloudtail reported a marginal drop in its net losses to Rs 30.2 crore in the same period.
Meanwhile, losses at up last year primarily owing to high expenses on employees, discounts, high spends on advertising and promotions. Although revenues rose, the increase in FY16 just about matched the growth in FY15.
For a clutch of 14 companies, which included e-retailers, furniture sellers, travel portals and food ordering and delivery players, losses ballooned 138% to Rs 10,670 crore, according to Kotak Institutional Equities. Between them Amazon India, Flipkart, and Paytm contributed 70% of the total losses during the year.
Not surprisingly, Amazon India reported the highest advertising spends of Rs 2,163 crore — the American firm has been going all out to gain market share and has committed $5 billion to the Indian market. Paytm’s tab was Rs 1,115 crore as it spent a fair amount on advertising its marketplace. Flipkart ran up a more modest bill of Rs 923 crore.