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Revenue and Employment No Longer Correlate in E-Commerce

Chennai: Among e-commerce companies, the correlation between revenue and employment no longer exists. Technology adoption and use of third-party logistics services has led to vast divergence in headcount in the sector.

In comparison with its rival Amazon India, the revenues reported by Flipkart in FY23 were 150 per cent higher. However, Amazon provides 109 per cent more jobs than Flipkart.

In FY2023, Amazon India reported revenue of Rs 22198 crore. As per the data of Brickwork Ratings, Flipkart registered revenues of Rs 56012 crore.

However, Amazon had 45,000 associates in the year while the number of people employed by Flipkart was half of it at 22,000.

Among the vertical e-commerce players, Myntra, the fashion e-tailer of the Flipkart group with revenues of Rs 4375 crore employs 8354 people.

FirstCry, the e-commerce company focused on baby products retailing, earned revenues of Rs 5632 crore while providing employment to 5700 people. Meesho, the fashion marketplace, has garnered revenues of Rs 5735 crore and has provided jobs to 1441 people. Nykaa, the beauty and personal care products e-tailer, reported Rs 5144 crore revenues and provided jobs to 4900 people.

IndiaMART the online B2B marketplace, had a very high ratio of employees. With revenues of Rs 985 crore it employed 5186 people. Tata Cliq, the e-commerce company of the Tata Group, made revenues of Rs 78.5 crore while offering 490 jobs.

“In e-commerce space, most of the employees are deployed in the distribution centres and for logistics. In the case of logistics, some use the service of third-party logistics providers,” said Arvind Singhal, founder and Chairman of Technopak Advisors.

According to Rituparna Chakraborty, co-founder of Teamlease Services, the hiring numbers among the large e-commerce companies have been tapering in recent times. “The kind of growth we used to see in the early years of e-commerce is not visible now. The larger base and the level of maturity of the companies affect hiring growth. Moreover, automation and use of technology have played a role,” she said.

Currently, the fast-growing quick commerce segment is a major job provider. The top three quick-commerce companies - Zepto, Blinkit, Swiggy and Instamart are reportedly employing around 50,000 contractual staff. Apart from this, they have over 4 lakh delivery partners. According to TeamLease Services, the workforce in the quick commerce space is expected to expand by at least 20-50 per cent in the festive months.

The government has announced the creation of 50 e-commerce hubs and expects that these hubs will generate up to 2.75 lakh additional jobs in the logistics sector.

( Source : Deccan Chronicle )
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