Flipkart Internet Private Limited, the B2B arm of Walmart-owned Flipkart, said that the gross revenue stood at impressive 26.4 percent growth with gross revenues having crossed Rs 70,000 crore for the first time while net losses during fiscal ending March 2024 declined by 13.5 percent. The Bengaluru-based firm recorded the loss decrease and thus signaled in a positive direction for health of the firm.
PC: The Economic Times
Sources – Tofler. FY24 Gross merchandise value by Flipkart Internet: Up 27.1 % to Rs 70,542 crore compared to last year’s Rs 55,824 crore. Therefore the company is also making great efforts to boost B2B as well as further expand markets.
With the non-operating income of Rs 302 crore, the total income was Rs 70,844 crore for the fiscal year. It earns its revenue through sales to resellers and commission based on referrals and advertisements from all product lines such as electronics, fashion, groceries, and more.
Contributions from Arvind, Ninjacart, Rubans, SASSAFRAS, and Inddus made through associates and joint ventures are also accounted for. These must have contributed handsomely to the marketplace reach of Flipkart while diversifying its products too.
Despite the revenue growth for Flipkart Internet, significant increases in expenses were seen over FY24. The highest increase was in the costs of materials, which rose from Rs 59,450 crore in FY23 to Rs 73,624.2 crore, an upsurge of 23.8%. Several factors could result in this increase in expenditures, such as the ever-increasing demand for logistical and supply chain resources with rising costs of goods sold.
The other expense that increased was employee benefit expenses at Rs 684.4 crore, as against Rs 639.2 crore a year ago. Clearly, a focus on the workforce is a strategic play to enhance service quality and customer experience. This is also reflected in the logistics cost, which rose to Rs 299.9 crore in FY24.
Although expenses are going up, Flipkart Internet was able to control the losses at 13.2%, bringing the total loss down to Rs 4,248 crore in fiscal. This is a very strong improvement and shows that the company is on the right path to profitability. However, the operating cash outflow has risen by 77.4% to Rs 6,392.7 crore, which is also a fact that while the revenues are rising, the cost of operations is also high.
That said, it is only since the first quarter of this fiscal. Cumulative outstanding losses have now risen to Rs 26,407 crore by FY24. Though still less than 10%, according to analysts, the company is in an excellent position to report profitability at any given time and possibly much before reporting profitability, is likely to be cash positive. So, that would be fantastic news, especially considering B2B e-commerce within India is likely to remain pretty competitive.
E-commerce to businesses has always formed the bedrock of Flipkart’s strategy to profitability, and it is expected that it would yield results before the consumer-facing business turns around. Issues such as GST invoicing and claims, which form a part of improving performance, are likely to have improved Flipkart’s business customers’ experience. This has helped since the company competes in the market with players such as Amazon Business and Moglix.
Walmart, Flipkart’s parent company, has indicated a clear expectation of the Indian business to start showing profits six years after its acquisition. The directive thus speaks to the need for Flipkart to enhance its margins and improve overall efficiency. As the company navigates the competitive landscape, its ability to adapt to market demands and streamline operations will be key to sustaining growth and achieving profitability.
In conclusion, Flipkart Internet’s financial results for FY24 suggest a promising trajectory with substantial growth in revenues and reduced losses. The company is ready to seize the emerging India e-commerce market as the B2B operations and customer experiences continue to shape up.
