Flipkart and Myntra Reveal Robust Financial Growth in FY25
In a testament to the burgeoning e-commerce landscape, Flipkart, alongside its fashion subsidiary Myntra, reported impressive financial results for the fiscal year 2025. Their synergistic advertising initiatives have successfully propelled revenue growth, with combined ad earnings elevating by 27% to an impressive ₹7,232 crore, as per filings submitted to the Registrar of Companies (RoC).
Flipkart Internet, the marketplace segment, disclosed revenues amounting to ₹20,493 crore, marking a year-on-year (YoY) increase of 14%. With net losses diminishing by 37% to ₹1,494 crore, the results are indicative of strategic fiscal management.
Concurrently, Myntra recorded a substantial operating revenue escalation of 18%, reaching ₹6,043 crore, while net profits skyrocketed nearly 18-fold to ₹548 crore from the previous ₹31 crore in FY24.
This remarkable performance correlates with the surge in advertising revenue—a trend that extends beyond Flipkart and Myntra to encompass competitors like Amazon and various quick commerce platforms.
Operational Paradigms of E-Commerce Platforms
Both Flipkart and Myntra function within a marketplace framework, allowing third-party vendors to list and market their offerings—similar to the Amazon model. Direct-to-consumer (D2C) brands and other merchants integrate into these ecosystems to leverage the extensive customer base and advanced technological infrastructure.
In exchange, these platforms impose fees or commissions ranging from 5% to 25%, contingent on the product category.
With the intensification of marketplace competition, brands are increasingly inclined to invest further for enhanced visibility. Flipkart and Myntra proffer a suite of promotional avenues, including sponsored posts, banner advertisements, and title sponsorships during festive sales.
Catalysts Behind the Advertising Boom
Flipkart Internet’s advertising revenue swelled by 27% to ₹6,317 crore for FY25, up from ₹4,973 crore in FY24. Myntra, in a commendable show, witnessed ad revenue increase of 28%, reaching ₹914.5 crore from the prior ₹712.3 crore.
“E-commerce platforms are strategically prioritizing ad revenue after observing Amazon’s rapid ascension over the past decade,” noted Satish Meena, an analyst based in Gurugram.
In FY24, Amazon Seller Services reported an ad revenue surge of 24%, amounting to ₹6,649 crore, up from ₹5,380 crore a year earlier. Results for fiscal 2025 are still pending.
Shifts in consumer behavior regarding product research and shopping have significantly influenced brands’ advertising focus.
“As consumers migrate from traditional platforms like Google and Meta to apps and websites for product searches, brands are eager to capitalize on this opportunity to enhance their visibility,” Meena elaborated.
To augment advertising potential, e-commerce titans are innovating new tools and technologies. For instance, Amazon India has introduced MX Player, an OTT streaming service enabling ad placements between segments.
Over the past year, Flipkart and Myntra have diversified their marketing toolkit, incorporating elements such as live commerce, short-form videos, micro-dramas, and product showcases from collaborative brands.
Implications of Advertising Revenue
While traditionally viewed as a supplementary income stream, advertising revenue has become strikingly lucrative for these e-commerce platforms, with an estimated 90-95% of this income contributing directly to profitability. This dynamic is especially pertinent as companies endeavor to mitigate losses.
Walmart, Flipkart’s parent entity, has acknowledged that its increasing investments in India’s burgeoning quick commerce sector are adversely impacting gross profits in Q2 of FY25.
For context, without the ₹914.5 crore generated from advertisement revenue, Myntra would have reported a loss of ₹366 crore for FY25.
For consumer internet firms, advertising has transcended the boundaries of auxiliary revenue, emerging as a quintessential component of their operational model. Undoubtedly, the ascension of ad revenues in recent years is closely linked to the accelerated digital penetration and growth within tier III and IV markets.
Previously, ET explored in detail the swift increase in advertising revenues within quick commerce platforms, wherein entities like Blinkit and Zepto individually amassed around ₹1,000 crore from ads in FY25, according to industry insiders.
Source link: M.economictimes.com.
