Cloudtail India Posts Loss In Fy18 Despite 27 Percent Growth In Revenue

Cloudtail India, a joint venture between Amazon and NR Narayana Murthy’s family office Catamaran Ventures, has posted losses for FY18, though it has shown decent revenue growth.

The e-commerce company clocked in revenues of 7149 crore, up 27 percent from 5631 crore in FY17, according to documents sourced from paper.vc, a data intelligence platform. However, Cloudtail posted a loss of 4.1 crore in FY18, against a profit of 1.59 crore in the previous fiscal. It also said the average net loss for the last three years was 10.9 crore.

The filing further said Cloudtail has appointed Sumit Sahay as its new CEO.

While Cloudtail’s revenue grew, the tax liability came in at 5.34 crore, lower than the 28.2 crore it paid in FY17. The company’s expenses came in at 7158 crore, more than its revenues, highlighting its business model where much money is invested to draw customers via discounts.

Further, Cloudtail stated that its foreign exchange outflow was 233 crore, while its inflow reduced to 3.06 crore, against 9.6 crore in FY17.

These developments need to be seen in the backdrop of a second draft of the e-commerce policy set to be released soon. In September, the Confederation of All India Traders (CAIT) had written to Union Commerce Minister Suresh Prabhu, seeking a codified policy, in addition to a regulatory authority, to regulate and monitor the market.

E-commerce majors — supported by heavy funding — are continuing with predatory pricing and deep discounting, which creates an uneven playing field for small e-tailers, said the CAIT note. Revised FDI laws in March 2016 allow FDI in online marketplaces but caps the contribution of a single seller to 25 per cent of the marketplace’s total business.

An e-commerce firm in India is defined as one where foreign investment doesn’t exceed 49 percent, the founder/promoter is a resident Indian and the platform company is controlled by Indian management.

FDI inflows in trading (including via e-commerce), jumped 86 percent to USD 4.35 billion in FY18. Foreign players are looking aggressively to invest in the Indian e-commerce market, which, Morgan Stanley estimates, is expected to grow to USD 200 billion in a decade.— The Hindu Business Line

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