ShopClues: an e-commerce platform that was once a unicorn and received backing from Tiger Global, was sold to Qoo10 for less than $100 million in 2019. Since its acquisition in FY20, the platform has been experiencing a continuous decline in scale and appears to be on the brink of being forgotten.
According to financial statements filed by its Indian entity with the Registrar of Companies, the operating scale of ShopClues has decreased by 48% to Rs 59.9 crore in FY22 from Rs 115.1 crore in FY21.
ShopClues Revenue
The majority of the firm’s operating revenue, which amounted to Rs 52.9 crore, came from commission earned on sales, fulfillment, packaging, and merchant listing fees, accounting for 88.3% of the total revenue. The parent company, Clues Network Inc, provided Rs 7 crore for technology support.
In terms of expenditure, shipment charges made up 27.5% of the total costs, which reduced by 37.9% from Rs 49.4 crore in FY21 to Rs 30.7 crore in FY22. As the company scaled down its operations, its employee benefit and advertising costs decreased by 56.1% and 40% to Rs 27.6 crore and Rs 24.8 crore, respectively, during FY22.
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ShopClues recorded INR 15.5 crore as miscellaneous expenses for items such as IT support, software development, office expenses, and transaction charges. Its total costs decreased by 35.9%, from INR 174.30 crore in FY21 to INR 111.7 crore in FY22.
Despite the overall reduction in costs, ShopClues’ losses remained steady at around INR 50 crore in FY22, and its EBITDA margin worsened to -72.03%. On average, the company spent INR 1.86 to earn a single rupee.
Conclusion
In summary, ShopClues’ miscellaneous expenses, including IT support, software development, office expenses, and transaction charges, amounted to INR 15.5 crore. Although the company reduced its overall costs by 35.9%, its losses remained stable at around INR 50 crore in FY22, resulting in a negative EBITDA margin of -72.03%. The company spent INR 1.86 to earn a single rupee on average.
Shopclues is a company that has been operating like a zombie firm, continuing to do business in a way that seems to be based on memory and without benefiting anyone except for a few individuals. At its peak, the company sold a wide variety of inexpensive items with little to no scrutiny of the sellers.
It is possible that some people still use the company to sell their products, but it is clear that this version of Shopclues is coming to an end, and it would be best to put it out of its misery as soon as possible.
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