Flipkart Internet narrows loss to ₹1,639 crore in fiscal 2017
Flipkart says the narrower losses was due to a fall in logistics and storage costs
Bengaluru: Flipkart Internet Pvt. Ltd, the marketplace arm of Flipkart India that books commissions on each sale, reported narrower losses, but the overall sales of the e-tailing major grew at a slower-than-expected pace, show regulatory documents.
For the year ended March 2017, Flipkart Internet reported losses of ₹1,639 crore, compared with ₹2,306 crore in the year-ago period.
However, revenue grew sluggishly at 15% to ₹2,253.5 crore, show documents filed with the Registrar of Companies and data from Tofler.
In fiscal 2016, Flipkart Internet had posted sales of ₹1,952 crore.
Flipkart said the narrower losses was due to a fall in logistics and storage costs. “The decrease in the net loss by 28.96% is due to reduction in logistics and storage service charges, collection charges and other expenses,” Flipkart said in the filings.
Earlier in May, US-based retail giant Walmart had bought a 77% stake in Flipkart for $16 billion, valuing India’s most valuable internet start-up at $21 billion.
Mint had reported that Flipkart is likely to burn $2 billion in cash over the next 18 months — an affirmation that sales growth, rather than cutting losses, remains the top priority for the online retailer after its takeover by Walmart.
Mint had also reported that Flipkart, which owns fashion retailers Myntra and Jabong, and mobile payment app PhonePe, currently has a burn rate of $70-80 million per month.
In an interview last September, Flipkart chief executive officer Kalyan Krishnamurthy indicated that all-out sales growth, and not profitability, was its biggest priority. “We will go into a very clear consumer market-building mode and expand the market. We want to bring as many people as possible into the e-commerce fold, as many categories and we will invest towards that. We are very comfortable on the burn that we have today.”
Flipkart’s strategy of focusing on sales growth has not changed since then and is unlikely to do so under Walmart, which is viewing Flipkart as a 20-year investment. Mint had reported that an initial public offering (IPO) by Flipkart is unlikely to happen for several years, as Walmart will have to invest heavily to make its $16-billion acquisition work.
Bengaluru-based Flipkart did not immediately respond to an email seeking comments on its latest numbers.
In November, Amazon India had said that revenue at its marketplace arm grew 105% in the year ended March.
Amazon has also repeatedly claimed that it is currently the market leader in India, although latest numbers sourced from company executives indicate that Flipkart still remains ahead of Amazon in terms of gross monthly sales.