B2B e-commerce platform ElasticRun reduces FY24 loss to Rs 359 crore

Company made a strategic pivot in FY24 to support high-margin regional brands to drive better profitability metrics

Business-to-business e-commerce platform ElasticRun saw its net loss for FY24 almost halve to Rs 359.6 crore from Rs 618.99 crore in reported in FY23. 

Revenue for FY24 came in at Rs 2,434.84 crore, down 48.6 per cent year-on-year against 4,738 crore.

 

Senior management of the firm attributed the march towards profitability to the firm’s pivot to expand its reach with regional, and smaller brands.

 

The Softbank and Prosus Venture-backed ElasticRun runs distribution for fast-moving consumer goods (FMCG) products in rural areas. It has made several changes to its business over the last two years, including closing down or moving away from segments that were not running efficiently.

 

“In FY24 we made a strategic pivot to support high-margin regional brands to drive better profitability metrics. This pivot has worked well for us,” said Sandeep Deshmukh, founder and CEO, ElasticRun.

“Currently our high-margin portfolio is over 90 per cent of our sales. And this cohort is at almost 3X the take rate of the previous year's assortment. This has enabled us to substantially improve the gross margins, even while reducing the GMV on the platform,” Deshmukh said.

He added that by November-December 2024 end, the company will be profitable on an operational level.

“Once we hit the profitability milestone, we will get back to our expansion journey. This will include geographical expansion and brand addition,” he told Business Standard.

 

With this regional focus, the company has positioned its platform as a launch pad for regional brands to capture the market backed by ElasticRun’s reach. The company now has at least 24 regional brands, which it calls ‘Crorepati’ brands. “Since October 2023, the top 10 regional brands have seen exponential growth beyond their home territories,” Deshmukh said.

 

One of these changes has also been foraying into creating its own private label. This category is currently contributing one-fifth to the sales of the company.

 

“Our decision to enter this segment was due to the gaps we saw, and we are clear that about 20 per cent of sales will be from our private brand, and we are clear that we are not competing with any FMCG brands,” Deshmukh said.

 

ElasticRun has come up with a detergent brand Esmo, which has been launched in hard water-dominated areas where normal detergent brands are not preferred. The other product brands that they launched include Popillo (confectionery), Wiki Wiki (instant noodles), Delible (snacks and namkeen), and Coco Breeze (personal care - hair oil).

 

ElasticRun is also foraying into quick commerce and D2C platforms by making use of its reach. The company will also expand its store reach from 2.5 lakh to 3.5-4 lakh stores by the end of FY25. ElasticRun has a presence in over 75,000 villages and works with over 200 brands.