Snapdeal losses mount 150% to Rs3,316 cr in FY16
18 Jan 2017
Snapdeal, run by Jasper Infotech Pvt Ltd, has seen a 150-per cent increase in losses from Rs1,328 crore in the year ended 31 March 2015 to around Rs3,316 crore in the year ended 31 March 2016.
Revenue grew 56 per cent to Rs1,457 crore from Rs933 crore in the same period, according to documents filed with the registrar of companies. This included the financials of digital payments platform Freecharge, which was acquired by Snapdeal in April 2015.
Revenue growth slumped from the 450 per cent Snapdeal reported in the year to March 2015. On the other hand, the company's expenses doubled to Rs4,416.6 crore in FY16 from Rs2,252.5 crore in previous financial year
''In order to deliver the best in class customer experience and to set up the necessary infrastructure for future growth, there was an increase in fulfilment and overhead expenses,'' the company said in the filings.
Snapdeal, which was until last year the main rival to homegrown e-commerce major Flipkart, has now been relegated to the third place with Amazon India raising stake in the Indian online marketplace.
Soft Bank-backed Snapdeal has been pushing hard to regain market share by repositioning its brand and by improving customer service levels.
In November, Snapdeal had undergone a branding overhaul and launched a new logo and television campaign, committing close to Rs200 crore in advertising and marketing spending in September and October.
In late 2016, Snapdeal decided to set up a wholesale unit E-Agility Solutions Pvt Ltd to buy products upfront. The move was intended to improve service levels through tighter control over inventory.
''In FY2016 we invested our capital in building our capabilities across technology, logistics and seller ecosystem to support the long term growth of our business,'' said a company spokesperson
Japan's Softbank Group is currently the largest shareholders in Snpadeal with close to a 33-per cent stake. Other top investors include Kalaari Capital, Nexus Venture Partners, eBay Inc., Foxconn Technology Group and Alibaba Group Holding Ltd.
Co-founders Kunal Bahl and Rohit Bansal now have less than a 6.5 per cent stake in the company, which has raised around $2 billion since its inception.
Founded in 2010 by school friends Bahl and Bansal as a deals site, Snapdeal delivers goods to over 5,000 cities and towns in India.