Snapdeal, one of India’s prominent e-commerce players, witnessed a 31% dip in consolidated operating revenue for the financial year 2022-23, falling from INR 539.6 Cr to INR 372 Cr. Despite the decline in sales, the company’s net loss demonstrated resilience, narrowing by 44.7% to INR 282.2 Cr from INR 510.3 Cr in the prior fiscal year, according to the latest financial report.
Founded in 2010 by Kunal Bahl and Rohit Bansal, Snapdeal generates revenue through a range of services and product deliveries. Ancillary activities, including collection services, fulfillment centers, packaging facilitation, courier facilitation, RTO/RPR fees, and closing fees, contribute significantly to the company’s revenue stream.
In the financial year under review, income from the sale of services dropped by 30.2% YoY to INR 57.7 Cr, while other operating revenue or income from ancillary activities decreased by 31.2% YoY to INR 314.2 Cr.
The financial statement also includes a one-time income of INR 20 Cr from the sale of investments in Freecharge, a subsidiary of Snapdeal.
Snapdeal’s subsidiaries, including Unicommerce, a SaaS-based order management and fulfillment platform, and Stellaro Brands, continue to play a strategic role in the company’s operations.
While Snapdeal withdrew its IPO plans in 2022 amid market uncertainties, recent reports suggest that it is considering an IPO for its subsidiary, Unicommerce eSolutions Pvt Ltd, in 2024, anticipating improved market conditions.
Snapdeal’s Spending Breakdown:
- Advertising Expenses: The decline in total expenses by 35.7% was primarily due to a substantial reduction of over 71% in advertising and promotional expenses, decreasing from INR 321.8 Cr in FY22 to INR 92 Cr in FY23.
- Employee Cost: While total expenses lowered, employee benefit expenses increased by 8%, reaching INR 307.5 Cr in FY23. Salaries and wages amounted to INR 178 Cr, and employee share-based payment (equity settled) rose by 22.5% YoY to INR 119 Cr.
- Purchases of Stock-In-Trade: Spending in this category decreased to INR 5.6 Cr in FY23 from INR 1.3 Cr in the previous year.
- Miscellaneous Expenses: Spending in this category decreased by almost 37% YoY to INR 226.3 Cr in FY23, although specific details were not elaborated.
Despite the sales drop, Snapdeal’s financial statements reveal a strategic focus on cost optimization and future cost reduction measures. As of March 31, 2023, the company reported cash and bank balances of INR 62.8 Cr, a significant reduction from INR 216.1 Cr the previous year.
