Flipkart Internet, clocked a 40% rise in losses to Rs 1,624 crore for the year ended March 31, 2019 a year after it managed to trim losses by 30%. This indicates that the corporate has started investing for growth under new owner Walmart. Flipkart Internet clocked a 51% rise in operating revenues during the year as compared to FY18, according to filings obtained from the corporate affairs ministry. US retail firm Walmart bought a 77% stake in Flipkart for $16 billion in August 2018.
After this, both the co-founders of the Indian e-tail giant Sachin and Binny Bansal left operating roles at the company. The costs for Flipkart primarily increased in employee expenses, which nearly doubled, even as it stepped up spending across advertising and marketing besides legal costs. “The company’s objective is to seek continual revenue growth, while minimising losses incurred due to increased credit risk exposure. The company trades only with recognised and credit-worthy third-parties,” said the filing.
Employee costs, including salaries and ESOPs, rose 91% to Rs 1,889 crore, while advertising & promotion expenses went up 56% to Rs 1,141 crore. Legal expenses climbed 68% to Rs 377 crore. While announcing the Flipkart deal, Walmart had said it expects losses of $1.5 billion for 2019 at the company. Flipkart’s parent company is registered in Singapore and it operates in India through a number of units.
Its core online retail business is under Flipkart Internet, and Flipkart India, which is the wholesale unit that has been used to source exclusive merchandise.