Flipkart, the pioneer in e-commerce retailing in India, now owned by US retail giant Wal-Mart grew its revenues by 33% during FY22, leading up to Rs. 10,476 Cr. At the same time, the company’s loss was Rs. 4,361 cr. for the same accounting period, as per regulatory filings sourced from BI platform Tofler.
Revenue from advertisement income on the platform grew 50% to Rs. 2,083 Cr. The Indian unit is the highest contributor globally for this vertical of revenue generation.
Logistics and delivery expenses however shot up 46% compared to last year to Rs. 5,045 Cr. This could be largely due to offering “free delivery” to customers, a market requirement in today’s times as rival Amazon offers the same to its Prime Customers.
Flipkart’s advertising & promotional expenses doubled ro Rs. 1,945 Cr. from Rs. 1,073 Cr. in the previous year. Ever since the reopening of offline retail stores since Feb. ’22, there has been a huge surge which had briefly impacted e-commerce sales. As schools and colleges started reopening, parents of children were forced to move back to bigger cities such as Mumbai, NCR, Bangalore, etc. It was the Tier 2/3/4 markets which were rising in the bulk of sales during FY21 and FY22 due to reverse migration. There was a mass exodus of citizens leaving big cities to their native towns. As they were not getting the products (and brands) in smaller towns, several lakhs of Indians took to e-commerce.
Amazon’s India unit is said to have reported a turnover of Rs.21,633 Cr. on a standalone basis for the same period, a 32% jump over last year. On the other hand, malls have reached pre-2019 levels of sales and several Indian brands in fashion, apparel, accessories etc. have either surpassed pre-pandemic sales or inching close.
The great Indian entertainment business – the cinema exhibition industry – has seen a resurgence, which is another important reasons why Indians are shopping offline more than ever. Though Hindi films have bombed back to back, pan-India films such as RRR, KGF, PS1, etc. have drawn the audiences to theatres, and vanilla stores and Department stores have been immensely benefitted.
It would be keen to observe how the online retailers fare in the post-Diwali sluggish season.
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