Snapdeal, an e-commerce giant headquartered in Gurugram, underwent a notable transformation in the fiscal year 2023 (FY23). It showcased a strategic shift towards profitability. The company, operated by AceVector Ltd., reported a consolidated revenue of Rs 388 crore, marking a decline from Rs 563 crore in the previous fiscal year.
This reduction in revenue can be attributed to Snapdeal’s strategic measures to curtail losses. Despite the fall in revenue, the company slashed its losses by a significant 45%, bringing them down to Rs 282 crore in FY23 from Rs 510 crore in FY22.
A key highlight of Snapdeal’s financial performance in FY23 was the enhancement in profit margins. The company witnessed a substantial increase in gross margins, which accounted for 35.5% of revenue in FY23, up from 31.8% in FY22. This boost was partly a result of more efficient marketing strategies, with marketing expenses reduced to 31.3% of revenue in FY23, a notable drop from 66.6% in FY22.
Moreover, Snapdeal successfully cut down marketplace expenses to 56.8% of revenue in FY23, down from 65% in FY22, achieved through supply chain optimizations and a decrease in returns.
The company’s subsidiaries, Unicommerce Esolutions and Stellar Brands, also reported their financial outcomes for FY23. While Unicommerce recorded a revenue of Rs 90 crore with a profit after tax of Rs 6.45 crore, Stellaro Brands generated a revenue of Rs 2.4 crore but incurred a loss of Rs 6.96 crore.
Looking ahead, Snapdeal remains focused on attaining profitability and expansion. The company claims to have already achieved profitability on a consolidated basis in the October-December quarter of FY24. CEO Himanshu Chakrawarti expressed optimism, envisioning FY24 as a turnaround year, specifically catering to the value lifestyle segment in tier-2 cities and beyond under the banner of ‘subdued public market sentiments. Nonetheless, the company remains committed to prioritizing profitability and efficiency, setting itself apart from other horizontal e-commerce players while reinforcing its dedication to India’s value segment.
