Softbank-backed e-commerce marketplace Snapdeal has reported 125 per cent jump in losses to Rs 2,960 crore in 2015-16. The Gurgaon-based e-commerce company has also lost its second place in India’s e-tailing space to global major Amazon and the gap with market leader Flipkart has also widened.
Snapdeal clocked Rs 1,456.6-crore revenue in FY16, an increase of 56 per cent over FY15, according to regulatory filings sourced by data firm Tofler. Snapdeal had reported losses to the tune of Rs 1,319.2 on revenue of Rs 933 crore in FY15.
“In FY16, we invested our capital in building our capabilities across technology, logistics and seller ecosystem to support the long-term growth of our business,” a Snapdeal spokesperson said.
The company’s total expenses doubled to Rs 4,416.6 crore in FY16 from Rs 2,252.5 crore in the previous financial year.
Snapdeal acquired six companies during the year, including its all-stock merger with wallet firm FreeCharge and stake in GoJavas, a logistics player. It also shifted its business model from chasing gross merchandise value (GMV) to net promoter score or customer satisfaction.
As losses mounted, Snapdeal could not keep pace with an aggressive Amazon and local rival Flipkart, which scripted a comeback after restructuring its business.
In November 2016, Softbank wrote-off around $550 million in the value of its investments in India, largely in Snapdeal and taxi aggregator Ola. Half of the write-off was due to the fluctuation of the Japanese Yen against the Indian rupee.
FreeCharge, the digital payments arm of Snapdeal had also reported a loss of Rs 235 crore on a revenue of Rs 36 crore in 2015-16, eroding the net worth of the company as it tried to catch-up with larger rival Paytm.
While losses fell 12.7 per cent in the financial year compared to the previous year, revenue growth stood at a flat 2.9 per cent, up from Rs 35 crore.