E-retailer Snapdeal notched up losses that were more than twice its revenues last year, a sign of how much cash is being burnt in the sector.
E-retailer Snapdeal notched up losses that were more than twice its revenues last year, a sign of how much cash is being burnt in the sector. Losses of Jasper Infotech — the holding company in which Snapdeal is housed — ballooned to R3,315 crore in 2015-16, while revenues came in at R1,506.8 crore, a filing with the registrar of companies showed. Revenues from operations were just R1214.3 crore.
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The top three e-tailers — Amazon, Flipkart and Snapdeal — together posted losses of over R9,000 crore, from close to R5,000 crore in 2014-15. Analysts have pointed out that while revenues of e-retailers increased in 2015-16, the growth more or less matched that in 2014-15, suggesting little additional buoyancy.
On the other hand, expenses continued to mount whether on employees or on advertising and promotions. Snapdeal’s total expenses surged to R4,800 crore with employee costs jumping threefold to R1,010 crore. Salaries at other e-commerce firms too have risen sharply. Advertising spends have been on the rise — Amazon spent R2,163 crore in 2015-16 while Paytm spent R1115 crore and Snapdeal R1230.7 crore.
Money raised by internet companies dropped to a three-year low in the December 2016 quarter, with less than $300 million coming in. In fact, funds were hard to come by in 2016 and the $2.7 billion that was invested was 50% lower than the amount invested in 2015. For perspective on how cautious investors have become, they had infused $2.6 billion in a single quarter in the three months to September 2015.