Walmart appears to have spent more on manpower costs at Flipkart after its takeover than what the company used to incur under the management by the Bansals. The entity that runs the Flipkart e-commerce platform Flipkart Internet, has reported a loss of ₹1,624 crore for the FY ending March 31, 2019. This figure is an increase of around 40% over the previous year. Interestingly, the company managed to cut down its losses by 30% only in the year previous to the takeover by Walmart.
While looking at the financial figures as filed by the company with the Ministry of Corporate Affairs (MCA) along with the explanations, under the head Employee costs, the amount of ₹1,889 crore has been indicated. This is a steep 91% above the figure under the same head last year. This figure includes ESOPs etc. The reason for this increase could be the American giant would have rewarded some employees at key levels to gain their confidence after the change in the management. There have been several resignations from the company at senior levels which might have necessitated payouts on account of settlements etc.
Two other areas where the expenses have gone up in the financial year under review are Advertising & promotions at ₹1,141 crore and Legal expenses at ₹377 crore. These have increased by 56% and 68% respectively over the corresponding figures for the previous year.
Among all these, the overall revenue for Flipkart Internet has grown a healthy 51% in the year to ₹4,234 crore.
The company has added the following remark to its filing:
“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”.
Rounding up the other statistics for the year, the main incomes for the company came from marketplace services which stood at ₹1,983 crore. This is the amount the company charges the sellers on its platform for allowing them to conduct transactions. The other two are ₹996 crore from logistics charges, and ₹576 crore towards advertising revenues. The last one has doubled in the year compared to the previous financial year.