Tata group’s Infiniti Retail, which sells electronic products and smartphones on Tata Neu shopping app, Croma shopping portal apart from running Croma chain of electronic stores, said online sales fell by a quarter in the last financial year as the company “reset its strategy to avoid competing for sales with negative contribution margins.”
Industry executives said this reflects a reduction in online discounting which Croma would earlier often do to compete with bigger ecommerce rivals like Amazon and Flipkart.
ET recently reported about Tata Sons’ focus on improving profitability of the group’s online businesses. The Tata group parent didn’t infuse fresh capital in any of the online entities including Infiniti Retail last fiscal.
Latest filings by Infiniti Retail to Registrar of Companies (RoC), accessed through business intelligence platform Tofler, showed efforts by the company has helped it to achieve EBITDA breakeven and positive operating cash flow in FY24.
The company reported Rs 15.89 crore profit before interest, tax, depreciation, amortisation and other comprehensive income in FY24 compared to a loss of Rs 401.52 crore in the previous fiscal.
Infiniti Retail attributed this to “significant improvement in efficiency parameters by utilising the operating leverage that comes with scale.” It said the pricing strategy was redesigned and multiple initiatives were rolled out to uplift operating margins and reduce overhead costs.
Infiniti Retail also limited the rise in net losses in FY24. Net loss during the year widened 3% to Rs 986.7 crore, compared to more than doubling in FY23. Total income rose over 12% to Rs 18,009.4 crore in FY24.
Electronics and smartphones are the largest revenue generators for Indian e-commerce platforms accounting for 45-50% of total sales.
