Digital platform revenues drive Rediff.com’s Q1 FY15 growth
The company's revenue stream, which used to be dominated by advertising, is gradually shifting away from advertising & is increasingly driven by revenues from its e-commerce marketplace & subscription revenues from the enterprise email and collaboration services
This past quarter saw the execution of Rediff.com’s strategy: to retain and grow its approximately 15 million engaged users through a variety of digital offerings and then earn revenue from digital services provided to these users and to businesses. The company’s revenue stream, which used to be dominated by advertising, is gradually shifting away from advertising and is increasingly driven by revenues from its e-commerce marketplace and subscription revenues from the enterprise email and collaboration services.
Overall revenue of $4.08 million for the 2014 first quarter is about the same as the comparable quarter last year (up 6 per cent up in Rupee terms). This number masks a 49 per cent growth (58 per cent in Rupee terms) in fee-based income, which grew to US$ 1.76 million offsetting a decline of 26 per cent (21 per cent in Rupee terms) in advertising revenue to US$1.62 million.
The progress that Rediff.com is making in the booming Indian online shopping market is evident in the company’s 27 per cent Take Rate (fees earned as a percentage of value of products transacted), its 14 per cent product margin, and a customer return rate of 11per cent. Additionally, approximately 23 per cent of the transactions on the company’s marketplace were done through mobile phones, a figure which continues to grow as mobile devices become more widespread throughout India and the broadband infrastructure continues to improve.
“India’s online shopping industry is extremely active now with multibillion dollar investments being made by companies such as Amazon building large warehouses, holding stock and making deliveries using large numbers of company employees. In this environment, we are pursuing a strategy of being a digital intermediary and using data science to enable small merchants to fulfill orders and be competitive. We hope to build a profitable and high growth niche in this industry. You can see signs of a new Rediff emerging,” said Ajit Balakrishnan, Chairman and CEO, Rediff.com India.
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