ShopKirana, a B2B e-commerce company meant to link retailers with brands, said the company has had a difficult fiscal year 2024 in which its gross revenue declined. Gross revenue fell by 6.26%, or from ₹681.81 crore to ₹639.16 crore, as per the company’s consolidated financial statements for FY24 compared to FY23. Despite all the hardships, ShopKirana managed to reduce its losses by more than 30%, an indication of its strength despite the competition.
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Majorly, the revenue base for ShopKirana constitutes the product segment which had constituted ₹ 637.32 crore contributing 99.71 percent to its operating revenue segment, registering a decline by 6.3 per cent over the previous year’s fiscal. It is relevant that the revenue from its service segment rose by an incredible 85.29 per cent at ₹ 1.26 crore. Nonoperating revenue contributed ₹4.2 crore taking the revenue for the year to FY24 to ₹643.37 crore.
The site mainly offers order taking, inventory management, and payment services for the retailers, besides offering other financial services such as banking and loan facilities. This multifaceted approach is designed to better the procurement process for small and medium-sized retailers.
ShopKirana also enacted various cost-cutting steps in FY24 that substantially contributed to improvement in the financial performance. That included materials, the top expense of the company, that amounted to 7.14% lower at ₹627.3 crore. Employee benefits also saw a 17.65% fall amounting to ₹35 crores. Transport cost declines and other operational costs which fell by 23.57% and 24.95% respectively brought an overall fall of 8.81% in total expenditure that went down to ₹698.63 crore.
These strategic moves helped ShopKirana contain its net losses to the tune of 30.5%, resulting in ₹55.25 crore for the year. Even though the company achieved this improvement, the RoCE and EBITDA margin were still negative at -69.6% and -7.85% respectively. On a unit basis, ShopKirana incurred an expense of ₹1.09 to generate one rupee in FY24, meaning the house still has a long way to go toward profitability.
## Competitive Landscape and Market Position
ShopKirana operates in a competitive Indian B2B e-commerce segment where its competition comes from some prominent players like Jumbotail and Udaan. While being the largest player in space, Udaan boasts a gross merchandise value (GMV) of ₹5,706.6 crore in FY24 and received funding from Lightspeed. Another significant competitor of this company is Jumbotail, which reported a revenue of ₹850 crore for FY23, however still waiting for its annual report FY24.
Despite the attractiveness of the market, many companies have, including ShopKirana, faced margin pressures and have resorted to cost-cutting at the cost of growth. The funding landscape is also challenging, since the backers in this space are not as keen on extending comprehensive financial support compared to bigger investors in other spaces. The focus on financing solutions, a common strategy in the B2B landscape, limits ShopKirana, leaving it to look for alternative sources of revenue and operational pivots.
As ShopKirana continues to grow, strategic adjustments are in order. The company needs to find ways to scale up operations without margin pressures that have kept it from growing. Improving service offerings and increasing partnerships could be key in navigating the competitive landscape.
Conclusion: ShopKirana faced tremendous scaling issues in FY24. The ability to bring losses down does indicate its commitment to better financial health. The upcoming fiscal will be very important for the platform as it tries to capitalize on its strengths while adapting to changing market dynamics.
