Snapdeal loss more than doubles to Rs3,316 cr in FY16,
New Delhi: Snapdeal.com’s loss more than doubled to Rs3,316 crore in the year ended 31 March 2016, even as revenue growth slowed sharply at the e-commerce marketplace.
Snapdeal, run by Jasper Infotech Pvt. Ltd, posted a 150% increase in loss from Rs1,328 crore in the year to March 2015. Revenue grew by 56% to Rs1,457 crore from Rs933 crore in the same period, according to documents filed with the registrar of companies.
Revenue growth slumped from the 450% growth Snapdeal reported in the year to March 2015.
The year-to-March 2016 numbers include the financials of digital payments platform Freecharge, which was acquired by Snapdeal in April 2015.
“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.
Last year was difficult for Snapdeal. The company, which had become the biggest local rival to Flipkart, slipped to the No. 3 position as Amazon India continued to gain market share.
The company has been pushing hard to regain market share by repositioning its brand and by improving customer service levels. It also cut costs and disclosed its intention to focus on profitability, not market share.
In November, Snapdeal decided to undergo 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–the most lucrative season for e-commerce sales.
In late 2016, Snapdeal, which had been a true marketplace until then, decided to set up a wholesale unit E-Agility Solutions Pvt. Ltd to buy products upfront. This resembles the structure adopted by Flipkart and Amazon, where closely associated entities WS Retail and Cloudtail, respectively, play a big role in selling on the e-commerce platforms.
The move came after Snapdeal decided to improve service levels by having 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
Snapdeal counts Japan’s Softbank Group as one of its largest shareholders, with close to a 33% stake in the company. 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% 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.