Flipkart, India’s e-commerce giant owned by Walmart, has unveiled its financial results for fiscal 2023, ending March 31, 2023. The heartbeat of Flipkart’s marketplace operations, Flipkart Internet, showcased an impressive 42% YoY growth in operating revenue, from Rs 10,477 crore in FY22 to Rs 14,845 crore in FY23. From seller commissions and advertising income to various seller services, Flipkart Internet appears to diversify its income avenues and optimise expenses efficiently. As a result, the total losses of the firm narrowed by 9% YoY, from Rs 4,419 crore to Rs 4,026 crore during the same period.
Delving into the specifics, Flipkart Internet’s logistics division contributed a significant 40% to its total revenue in FY23. This logistics segment revenue surged 50% YoY to Rs 5,789 crore during the last fiscal year. This highlights Flipkart’s strategic focus on bolstering its supply chain, a crucial factor in its e-commerce dominance.
In FY23, Flipkart Internet’s marketplace services division was a significant revenue contributor, accounting for a notable one-fourth of the company’s total earnings during FY23. The segment generated Rs 3,713 crore in revenue during the fiscal year ended March 31, 2023, with a robust 32% YoY growth.
Advertising played a crucial role in Flipkart Internet’s revenue stream, constituting 23% of its total earnings in FY23. The advertising revenue increased 60% YoY to Rs 3,324 crore in fiscal year 2023, from Rs 2,083 crore recorded in the previous fiscal year. This growth underscores Flipkart’s successful monetization strategies and the increasing value businesses see in advertising on its platform.
Flipkart Internet Expenses FY23
Flipkart Internet’s overall expenses grew 26% YoY to Rs 19,043 crore in FY23. This rise indicates the company’s significant investments and operational commitments during the year.
- A significant portion of Flipkart Internet’s expenses went towards its workforce. The company allocated Rs 4,482 crore for employee benefits in FY23, a notable uptick from the Rs 3,735 crore spent the previous year, suggesting potential salary increases, bonuses, or other employee-related expenses.
- As e-commerce thrives on efficient logistics, Flipkart’s investment in this sector was evident. With a spending of Rs 6,571 crore on logistics in FY23, the company showcased a 30% growth from the previous fiscal year, emphasizing its commitment to timely deliveries and robust supply chain management.
- Flipkart Internet increased its advertising and promotional budget to Rs 2,407 crore in FY23, up from Rs 1,945 crore during the previous fiscal year.
Flipkart India, the wholesale subsidiary of Flipkart, primarily serves online sellers who operate on Flipkart Internet, the main marketplace platform.
Flipkart India reported a 9% YoY increase in its operating revenue for FY23, amounting to Rs 55,823 crore. However, there was a concerning 42% YoY increase in its losses, totalling Rs 4,845 crore during the fiscal year.
In contrast, Amazon Seller Services in India reported only 3% YoY growth in its operating revenue, amounting to Rs 22,198 crore during FY23. However, the net losses surged 33% YoY to Rs 4,854 crore during the same period.
In a Nutshell
Flipkart Internet’s success is a positive sign for the Indian e-commerce market, which is expected to reach $350 billion by 2030. The e-commerce battleground in India is witnessing an intense duel between giants Flipkart and Amazon India.
Flipkart is currently in advanced negotiations to raise up to $1 billion from an array of investors, including its parent company, Walmart. This fundraising is anticipated to uplift Flipkart’s valuation by a notable 5-10% from its current standing of approximately $33 billion. Should Flipkart successfully raise this capital, it would mark a significant milestone, reminiscent of its impressive 2021 funding round when it garnered $3.6 billion, elevating its valuation to $37.6 billion.
