Will cut e-commerce biz losses over 6-12 months: Network18

Network18 Media and Investments has set itself a six-12 month timeline to pare losses in its digital commerce business. Sarbvir Singh, head of investments, Network18, says the group will consider stake sales in non-core businesses so as to focus better on the main operations.

"So you should expect us to be showing some more stake sales in the next six months or so," he said in an interview with CNBC-TV18.

Singh said the group’s main revenue generators--Homeshop18 and bookmyshow.com—were growing at a fast clip despite spending much lower than rivals like Flipkart.

"Having said that we do recognise the losses are fairly steep. So we are looking to a six-12 month horizon in which our commerce businesses will cut their losses sharply or raise capital," Singh said.

Below is an edited transcript of the interview on CNBC-TV18.

Q: I want to ask you whether there is any more monetization on the cards after the stake sale in bookmyshow.com?

A: We sold bookmyshow.com last quarter and made a good profit of about Rs 50 crore. Network18 is now focused on three main businesses; the television broadcasting business, digital content business and digital commerce business. So anything else that we have is fair game for monetization or to be managed for profit. So you should expect us to be showing some more stake sales in the next six months or so.

Q: On the digital side, your revenues have gone up close to about 72 percent on an year on year (YoY) basis but at the operating level losses have widened. What is the outlook with revenues growing so fast? When are you expecting a turnaround or an improvement at the operating level?

A: To explain a bit on our digital commerce portion which is where most of the growth and consequently the losses are coming from, we are number one in two large areas of digital commerce. One is the entertainment ticketing operations with Bookmyshow and secondly now horizontal television and web commerce with Homeshop18. What is happening in these markets is that while they are growing rapidly, we are growing over 100 percent YoY basis but there is a customer acquisition phase that is on. And our competitors like Flipkart are spending a lot of money. So compared to those people we are spending much less more and are still leaders and are growing very fast.

So this is a once in a lifetime opportunity which we need to keep focused on. Having said that we do recognise the losses are fairly steep. So we are looking to a 6-12 month horizon in which our commerce businesses will cut their losses sharply or raise capital.

Disclaimer: Moneycontrol and TV18 are part of the Network18 Group.