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Flipkart's key units post significant losses in FY21 amid strong revenue growth

Flipkart's wholesale unit Flipkart India saw a 25% revenue growth in FY21 while marketplace arm Flipkart Internet witnessed a 28% revenue jump.

January 05, 2022 / 09:20 PM IST
Flipkart | Representative image

Flipkart | Representative image

Walmart-owned Flipkart continued to post significant losses across two key units - wholesale unit Flipkart India and marketplace arm Flipkart Internet, even as it witnessed robust revenue growth in the financial year FY21.

Flipkart India saw its losses narrow by 22.4% year-on-year (YoY) to Rs 2,444.8 crore for the financial year ended March 31, 2021, from Rs 3,150.3 crore loss in the year-ago period, according to regulatory filings shared by business intelligence firm Tofler. It's worth noting that Flipkart's parent company is based in Singapore and operates in the country through various units.

Revenue from operations grew by 25.7% YoY to Rs 42,941.7 crore for FY21, from Rs 34,170.5 crore in FY20. Overall revenue saw a 25.3% YoY jump to Rs 43,356.5 crore in FY21 from Rs 34,610.1 crore in FY20.

Meanwhile, Flipkart Internet witnessed a 49% YoY increase in its losses to Rs 2,881.3 crore in FY21, from Rs 1,936.6 crore loss in the year-ago period.

Flipkart Internet's operational revenue grew by 32.5% YoY to Rs 7,840.4 crore during the financial year FY21, from Rs 5,916.3 crore in FY20. Overall revenue rose 28% YoY to Rs 8,115 crore in FY21 from Rs 6,317.7 crore in FY20.

Flipkart's FY21 expenditure

The marketplace unit's total expenses increased by 33.2% to Rs 10,996.3 crore for the financial year, from Rs 8,254.3 crore in the previous fiscal.

Among its major expenses, employee benefit expenses jumped by 21.5% YoY to Rs 3,163.4 crore from Rs 2,602.7 crore while advertising and promotional expenses declined by 3.8% YoY to Rs 1,073.4 crore from Rs 1,114.6 crore.

Interestingly, the firm's legal professional charges also rose by 40.8% to Rs 836.7 crore for FY21, from Rs 594.2 crore. It's worth noting that Flipkart along with Amazon is facing an antitrust probe from the Competition Commission of India (CCI) for alleged violations of the competition law.

On the other hand, Flipkart India spent Rs 47,629.9 crore on purchase of stocks (goods) traded by the entity during FY21, a 25.5% jump from Rs 37,636.7 crore in FY20.

However, taking into account the difference between the total closing and opening inventories for the year, along with other expenses, the wholesale unit's total expenses rose by 21.3% YoY to Rs 45,801.3 crore in FY21 from Rs 37,760.4 crore in FY20.

Revenue segments

Flipkart India earns almost all of its operational revenues from the sale of goods which stood at Rs 42,939.8 crore for FY21, a 25.7% jump from Rs 34,170.5 crore in FY20.

Meanwhile, Flipkart Internet earns revenues from three key segments like marketplace services, logistic services, advertising services, which account for about 85% of the marketplace unit's revenues.

Income from marketplace services, which is primarily transaction fees paid by vendors on the platform, rose 21.6% YoY to Rs 2,794.6 crore for the financial year, from Rs 2,297.8 crore in the previous fiscal. It accounted for 35.6% of Flipkart Internet's operational revenue for FY21.

Income from logistic services, which includes shipping services grew to Rs 2,445.4 crore in FY21, from Rs 1,618.5 crore in FY20. The segment accounted for 31.2% of the marketplace unit's revenues in FY21.

What's also particularly noteworthy is that revenues from advertising services grew by 37.4% to Rs 1,385.7 crore in FY21, from Rs 1,008.8 crore in FY20. The segment contributed for 17.7% of the marketplace unit's revenues for the fiscal.

Revenue from collection services, which is a fixed percentage on the transaction value retained by the firm on the service completion, grew to Rs 836 crore from Rs 804.2 crore while revenue from storage services that include warehousing services increased to Rs 57.7 crore from Rs 20.8 crore.

These financials come at a time when Flipkart is facing growing competition from rivals such as Amazon and Meesho.

Flipkart overshadowed Amazon by grabbing a larger market share in a record $8.3 billion sales during the festive season last year, according to research and consultancy firm Redseer. Both the firms did not disclose the gross merchandise value (GMV) of goods sold during the season.

In November, the Walmart-owned firm also forayed into the healthcare segment by acquiring a majority stake in Sastasundar, an online pharmacy and digital healthcare platform. The company is reportedly mulling a public offering later this year or early next year.

Also readFlipkart vs Meesho: A new war in Indian e-commerce
Vikas SN
first published: Jan 4, 2022 09:58 pm