E-commerce firm Snapdeal saw its losses mounting to Rs 4,647 crore for the fiscal ending March 2017, impacted by a provision for ‘impairment of goodwill’ of Rs 1,797 crore.
According to regulatory filing to the corporate affairs ministry by Jasper Infotech, which runs Snapdeal, had registered a net loss of Rs 3,340 crore in 2015-16.
According to a PTI report: The company’s total income also declined by 12.6 per cent to Rs 1,291.3 crore in FY2017 from Rs 1,478.2 crore in the previous year.
When contacted by PTI, Snapdeal spokesperson said the financial statement for the year 2016-17 ‘reflects the first stage of Snapdeal’s focus on unit economics and business efficiencies’.
“Key highlights in this regard are the reduction in fulfilment cost by more than 20 percent (as a percentage of operating revenue) and reduction in operational losses by nearly 25 per cent (excluding non-recurring cost on account of impairment of assets),” the spokesperson told PTI.
He further told PTI that the company continues to make “rapid progress in driving profitable growth, which will be reflected in the results for the financial year 2017-18”.
Snapdeal has seen its business being impacted severely by the intense competition in the e-commerce segment. While players, including the likes of Amazon and Flipkart, have pumped in billions of dollars in investments, they continue to operate in losses.
Analysts are of the view that it will be a couple of years before these players can hit profitability. Last year, Snapdeal dumped the US $950-million takeover offer from Flipkart with Snapdeal founders Kunal Bahl and Rohit Bansal saying the company will pursue a fresh strategy in the Indian market.
Last year, Snapdeal sold its payment services unit, Freecharge to Axis Bank for Rs 385 crore, almost 90 percent lower than what it had paid for the firm in 2015.
In January this year, its logistics arm – Vulcan Express – was acquired by Kishore Biyani’s Future Supply Chain Solutions in an all-cash deal valued at Rs 35 crore. Snapdeal has also significantly reduced its headcount to rein in costs.