Total losses for on the internet grocery firm Grofers enhanced by more than 40% year-on-year to Rs 637.49 crore in the year to March 31, 2020. The business incurred greater costs which widened to Rs 814.29 crore in FY20 from Rs 531.62 crore in FY19, according to the company’s filings with the RoC sourced from enterprise intelligence platform Tofler.
Revenue from operations grew by a tiny more than 135% y-o-y to Rs 165.27 crore in FY20.
The company’s marketing and promotional costs shot up to Rs 179.21 crore in the final economic year from Rs 82.08 crore in FY19. Discounting charges rose to Rs 158.59 crore in FY20 compared to Rs 128.32 crore in FY19, the documents showed.
Grofers mentioned that new households added amid the pandemic had accelerated the firm’s path to profitability throughout the lockdown. The business is eyeing general profitability in the existing year. Analysts observed that a considerable proportion of the 150 million on the internet purchasers have began spending on e-groceries. Saurabh Kumar, founder, Grofers, claims that the firm has acquired 18 lakh new shoppers and managed to retain more than 70% of these who made use of the platform in the 1st month of the pandemic. “We expect this trend to continue in the coming months as there seems to be a natural demand for groceries online,” Kumar had told FE in October final year.
Consultants at RedSeer mentioned there was an anticipated 1.5 to 1.6 instances raise in households that subscribed to on the internet grocery in May 2020 compared to the starting of the year. Grofers that is gearing up for an IPO later this year plans to broaden its private label offerings and has reportedly allocated $15 million for the category. Experts point out that it is not as although the enterprise models of e-commerce firms are in themselves unviable, it is merely that businesses continue to invest in acquiring shoppers.
“It is not so much of a unit economics challenge for some of the scaled-up players,” mentioned Arpit Mathur, companion, Kearney.