Online fashion retailer Myntra Designs’ advertisement expense jumped to Rs 468 crore for the fiscal ended 31st March 2020 from Rs 395.2 crore the previous fiscal.
The advertising trade expense had gone up from Rs409.6 crore to Rs.552.9 crore, according to Registrar of Companies filing shared by market intelligence firm Tofler. Apart from advertisement expense, the advertising business expense also includes business promotion expenses, which increased to Rs 84.8 crore in FY20 from Rs 14.4 crore in FY19.
The company generates its revenue from marketplace services, logistics services, and consultancy services to varied brands. However, the corporate noted that it’s currently considering and exploring viable business opportunities with the support of continued support of its intermediate company.
The company’s net loss increased by 38% to Rs 744.3 crore during the fiscal year under review as against an internet loss of Rs 539.2 crore within the previous fiscal year.
The revenue from marketplace services increased from Rs 671.6 crore to Rs 951.1 crore. Revenue from logistic services quite doubled to Rs 544.2 crore from Rs 205.1 crore. The consultancy services revenue has been at Rs 34.3 crore as against Rs 75.4 crore.
The company report other operating revenue of Rs 145.8 crore contrasting to Rs 89 crore. The company said that the marketplace services generate revenue basically from transaction fees paid by the vendors in the marketplace. Revenue associated with transaction fees and any related fulfillment fees earned from these arrangements is recognized when the services are rendered, which generally happens at the time underlying sales have been concluded.
Revenue from logistics services is recognized at some extent in time when the products are delivered to the top customers while revenue from consultancy services is recognized as and when services are provided over a period of time.
The company noted that other revenue primarily includes sales of advertising services, which are recognized as ads are delivered supported by the number of clicks (which are generated whenever users on the company’s platforms click through its advertisements to an advertiser’s designated website) or impressions (i.e., the number of times that a billboard appears in pages viewed by users of the company’s platforms).
FK Myntra Holdings Private Limited, Singapore is that the holding of Myntra Designs while Flipkart Private Limited, Singapore is that the intermediate company.
