Digital platform revenues drive 1Q14 growth
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 ecommerce marketplace and subscription revenues from the enterprise email and collaboration services.
Overall revenue of $4.08 million for the 2014 first quarter is about the same as the comparable quarter last year (up 6% up in Rupee terms). This number masks a 49% growth (58% in Rupee terms) in fee based income which grew to US$ 1.76 million offsetting a decline of 26% (21% in Rupee terms) in advertising revenue to US$1.62 million.
The progress that Rediff.com is making towards finding a profitable, high growth niche in the booming Indian online shopping market is evident in the Company’s 27% Take Rate (fees earned as a percentage of value of products transacted), its healthy +14% -product margin, and a customer return rate as low as 11%. Additionally, approximately 23% 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 Ltd.
Further details of Rediff.com’s results for the first fiscal quarter ended June 30, 2014 are appended in tabular form to this press release. A script of the earnings result conference call held on August 18, 2014 will also be made available on Rediff’s Investor Information website at investor.rediff.com.