Snapdeal, a Gurugram-based e-commerce platform, has shown a significant shift towards profitability in the fiscal year 2023 (FY23). The company, operated by AceVector Ltd., reported a consolidated revenue of Rs 388 crore, a decrease from Rs 563 crore in FY22.
The decline is attributed to the company's strategic loss reduction measures. Despite the revenue drop, Snapdeal reduced its losses by 45%, bringing them down to Rs 282 crore in FY23 from Rs 510 crore in FY22.
Enhanced profit margins
The firm has made notable improvements in its financial health, with a marked increase in gross margins to 35.5% of revenue in FY23, up from 31.8% in FY22.
The improvement is partly due to more efficient marketing strategies, where marketing and business promotion expenses were significantly reduced to 31.3% of revenue in FY23, a sharp decrease from 66.6% in FY22.
Additionally, the company has reduced marketplace expenses to 56.8% of revenue in FY23, down from 65% in FY22, achieved through supply chain optimizations and a decrease in returns.
Snapdeal's subsidiaries, Unicommerce Esolutions and Stellaro Brands, also reported their financial outcomes for FY23. Unicommerce recorded a revenue of Rs 90 crore with a profit after tax of Rs 6.45 crore. In contrast, Stellaro Brands posted a revenue of Rs 2.4 crore but incurred a loss of Rs 6.96 crore.
Focusing on profitability
The company is optimistic about its future, focusing on achieving break-even and expanding profitability. Snapdeal claims to have already achieved profitability on a consolidated basis in the October-December quarter of FY24.
CEO Himanshu Chakrawarti expressed confidence in FY24 being a turnaround year, emphasizing the company's focus on the value lifestyle segment, particularly in tier-2 cities and beyond, aligning with their vision of 'Snapdeal 2.0'.
Any IPO plans?
Snapdeal had initially filed for an Initial Public Offering (IPO) with the Security Exchange Board of India in December 2021. However, the company withdrew its $152 million IPO plan due to weak public market sentiments.
Despite this, Snapdeal continues to prioritize profitability and efficiency, distinguishing itself from other horizontal e-commerce players and reinforcing its commitment to the value segment in the Indian market.
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