Flipkart,Amazon & Snapdeal make Huge losses than Actual Sales (SD is kinda better)

S

swatkats

Juggernaut
Flipkart, Amazon and Snapdeal, all of them have raised investments or have commitments of $1 Billion or more. This money is being burned to acquire new customers, offer discounts and pump up products on offer.
While we are all aware that these sites are losing money, you will be amazed to know the quantum of loss these ecommerce players have incurred.

Check out these 2 graphs below and be stunned.

D8rWIkc.jpg


Please note that the revenue figures above are not the price of products sold (GMV), as these are all marketplaces, and their revenues come from commissions they get from sellers or listing fees that they charge to list the products on their site.

GMV or Gross Merchandize Value represents the price of products sold and net revenues is just a fraction of that!

Flipkart leads the race with net revenue of 179 crore followed by Amazon at 168.9 crore and Snapdeal at 154.11 crore.

However, when it comes to losses, Flipkart leads by a much bigger margin and their loss for 2013-14 stands at Rs. 400 Crore. Comparatively, Amazon losses are pegged at Rs. 321.3 crore and Snapdeal had least losses of 3 with 264.6 crore

See the graph below to understand how much loss each player incurs for every rupee in net revenues.

VSeeMDI.jpg


Flipkart leads the race here to losing 2.23 rupees for every 1 rupee of revenue. Amazon loses 1.90 and Snapdeal has least amount of losses at Rs. 1.72.


Source: http://trak.in/tags/business/2014/11/06/flipkart-amazon-snapdeal-revenues-losses-comparison/
 
They are investing money to gain a bigger customer base, launching new product categories, enhancing website.
Basically like any other business they are expanding now and would have a target of making money few years down the line.

Even Reliance mart, Aditya's MORE and Big Bazaar have made losses in the initial period of expansion.
Its basically depending on funds when a business wants to stop expanding and start monetizing.
 
Fenix said:
These are ploys to save on tax. Why will i run any business if it running into losses ?
Click to expand...
To start a new business, a heavy investment is required. The only difference here is that FK hasn't able to break even until now (i.e. gained enough profit to cover the investment). When it does, it will definitely run in profit.
 
Flipkart only
Two main entities controlled by Flipkart, India’s largest e-commerce firm, reported a loss of about Rs.2,000 crore in the year ended March, up from a loss of Rs.715 crore in the previous year, the Economic Times reported on Thursday, citing regulatory filings.

Flipkart Internet, which runs the consumer-facing portal, registered a net loss of Rs 1,096.4 crore, while that of Flipkart India, the wholesale arm, was Rs 836.5 crore, according to a Registrar of Companies filing on Monday. A year ago, the units had a combined loss of Rs 715 crore.
Click to expand...

Flipkart could post between 35-50% of its sales as operating loss due to its high logistics cost and discounting," said Ruchi Sally, director at retail consultancy Elargir Solutions. "The only way to reduce (this) is to diversify in higher-margin product categories such as apparel and home.
Click to expand...

http://www.livemint.com/Companies/U...t-reports-a-loss-of-Rs2000-crore-in-FY15.html
http://timesofindia.indiatimes.com/...loss-in-discount-war/articleshow/50020933.cms
 
Back
Top