E-commerce Trends
How Flipkart & Amazon Actually Make Money
The business engine behind Big Billion Days and the Great Indian Festival — and why it looks nothing like a normal retail P&L
The real business model: four revenue layers stacked on one marketplace
Both platforms run what looks like a retail shopfront but are structurally closer to a landlord-and-toll-booth operation. Sellers pay to list, pay to be found, pay to ship, and increasingly pay to get paid. Flipkart Internet's FY25 filings show marketplace fee revenue more than doubling to ₹7,751 crore, up from ₹3,734 crore in FY24, while advertising revenue rose 27% to ₹6,317 crore and logistics revenue actually fell to ₹4,224 crore from ₹6,838 crore the year before.
Amazon's Indian marketplace arm, Amazon Seller Services, tells a similar story at a larger scale. Operating revenue crossed ₹30,000 crore, up 19% to ₹30,138.6 crore, and the loss narrowed dramatically — down more than 89% year-on-year to ₹374.3 crore, against a ₹3,469.5 crore loss the year before. That swing wasn't from selling more phones and TVs at better margins. It came from the toll-booth layers growing faster than the retail layer.
Marketplace commissions: the base layer
Both platforms charge sellers a cut of every transaction, typically ranging between 5% and 25% depending on the category, with electronics and mobiles at the low end and fashion or lifestyle categories at the high end. This is the oldest and least glamorous revenue line — but it's also the one that scales automatically with GMV, which is exactly why the sale season matters so much to both companies: more transaction volume in October means more commission income booked in that quarter, even before ads or logistics are counted.
For Amazon, marketplace services revenue reached ₹17,328.1 crore in FY25, a 21% increase and the single largest chunk of its topline — roughly 57% of total operating revenue.
Retail media: the part actually making money
This is the layer practitioners should be paying closest attention to. Retail media — sponsored listings, banner placements, and search ads inside the app — has become the highest-margin business either company runs, because it needs no inventory, no warehouses, and no delivery fleet.
Amazon India's ad revenue surged 25% to ₹8,342 crore in FY25, now contributing close to 28% of its total revenue and pulling ahead of every other segment except marketplace fees. Flipkart's ad revenue stood at ₹6,317 crore in the same year — smaller, but growing at a similar clip, and up nearly 600% since FY20, when it was worth just ₹1,008 crore.
Logistics: necessary, expensive, and shrinking as a revenue line
Flipkart's Ekart and Amazon's fulfilment network exist to guarantee delivery speed, which is the single biggest lever on conversion rate in Indian e-commerce. But logistics is capital-intensive and thin-margin — Flipkart's own logistics arm trimmed its FY25 loss to ₹1,500 crore, and transportation is consistently one of the largest line items in Amazon's cost structure, with transportation and distribution expenses surging 11% to ₹8,336.7 crore in FY25.
Logistics is run less as a profit centre and more as a moat — a cost both platforms absorb to protect the commission and ad revenue sitting on top of it.
Fintech and private labels: the newer bets
Both companies layer financial products — EMI, buy-now-pay-later, seller lending, insurance — on top of the transaction flow they already control. These products don't show up as a huge revenue line yet in either filing, but they matter strategically: they increase repeat purchase frequency and give the platform a second data stream that pure marketplace commissions never generate.
Sale season vs. the rest of the year: where the profit structure actually shifts
The 2025 festive season gives a clean read on this. The first 11 days of the 2025 festive sale clocked more than ₹60,000 crore in GMV — nearly 3.5x business-as-usual levels — a 20-22% year-on-year jump, with around 90 million shoppers participating at an average spend of close to ₹7,000. The first two days alone generated ₹25,000 crore in GMV, up 23-25% over the same period last year.
GMV across the first 11 days of Festive Sale 2025 alone — roughly 3.5 times normal daily online retail volume.
During the sale window, commission revenue and ad revenue both spike — sellers bid harder on sponsored placements to be visible amid the discount noise, and transaction volume lifts commission income proportionally. Logistics costs spike even faster, though, because delivery promises tighten and volumes surge simultaneously. The net effect: sale events are a customer-acquisition and revenue-recognition event, not necessarily a profit event.
Flipkart vs Amazon: FY25 scorecard
| Metric | Flipkart Internet | Amazon Seller Services |
| FY25 Revenue | ₹20,493 crore | ₹30,139 crore |
| Revenue growth YoY | 14% | 19% |
| Net loss FY25 | ₹1,494 crore | ₹374 crore |
| Loss change YoY | Narrowed 37% | Narrowed 89% |
| Ad revenue | ₹6,317 crore | ₹8,342 crore |
| Marketplace/commission revenue | ₹7,751 crore | ₹17,328 crore |
| Market share (FY23 est.) | ~48% | ~30-35% |
Figures from company filings with the Registrar of Companies, as reported by Business Standard, Medianama, Inc42, and Exchange4Media.
FAQs
- Do Flipkart and Amazon lose money on every sale during Big Billion Days?
- Not necessarily on every unit, but heavy discounting compressed by aggressive delivery-speed commitments does squeeze margins hard during the sale window. The platforms offset this with the ad and commission revenue the sale surge generates.
- Is advertising really bigger than product sales for these companies?
- Advertising isn't bigger than total commerce volume, but it's become the highest-margin revenue line for both companies, and it's growing faster than logistics or even marketplace commissions in percentage terms.
- Why do sellers keep participating if margins get squeezed?
- Sale-season visibility and volume are hard to replicate any other time of year, and platform ad tools let sellers buy their way to visibility even when organic discovery gets harder amid the noise.
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