Snapdeal, a local e-commerce firm's losses have more than doubled to Rs 2,960 crore for the financial year that ended in March 2016, when compared to Rs 1,319 crore in the previous year. One of the many reasons for the losses is the continuously eroding market share to local rival Flipkart and US-based e-commerce firm Amazon.
During the same period, the New Delhi-based online marketplace reported 50 percent rise in revenues to Rs 1,456 crore. It had reported losses to the tune of Rs 1,319.2 crore on revenues of Rs 933 crore in the previous fiscal (FY15), Mint cited documents filed with the registrar of companies as saying.
Also read: Snapdeal to change logo, tagline ahead of Diwali sales
"In order to deliver the best in class customer experience and to set up necessary infrastructure for future growth, there was an increase in fulfilment and overhead expenses," the company said. Snapdeal fell to the number three slot in ranking as Amazon India continued to gain market share.
Although Snapdeal has said it aims to focus on profitability and not market share, the e-commerce firm underwent a branding overhaul and had launched a new logo two months ago. It had committed close to Rs 200 crore on advertising and market spending in September and October last year, Times of India reported.
"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," the publication quoted the company as saying.
Japan's SoftBank is one of the largest shareholders in Snapdeal, holding a 33 percent stake in the company. Some of the other investors include Kalaari Capital, Nexus Venture Partners, E-Bay, Foxconn and Alibaba Group Holding Ltd.
The news of Snapdeal reporting losses comes at a time when its rivals Amazon India and Flipkart have stepped up on investments. Flipkart has invested $2 million (about Rs 13.6 crore) in a parenting social media platform called Tinystep on Thursday, Press Trust of India reported.
