Intrasoft Technologies, which owns and operates the e-greeting cards site 123greetings.com has reported total operational revenue (not including ‘Other Income’) of Rs 51.68 crore for the quarter ended December 31, 2013, registering a 78% increase from Rs 29.07 crore in the same quarter last year and a 92.84% increase from Rs 26.80 crore in the previous quarter.
The company however continues to report declining profits: Rs 0.15 crore for the quarter ended December 31, 2013, down from 0.82 crore in the same quarter last year and Rs 0.57 crore in the previous quarter. This is despite it being a holiday quarter with both Indian (Diwali) and US (Christmas) festive period happening in this period and thereby being the most important quarter for the company.
Note that these consolidated results include the results of the company’s wholly owned subsidiaries, 123Greetings.com Inc (USA), 123Greetings Singapore and One Two Three Greetings (India).
Discussing the results, Intrasoft Technologies managing director Arvind Kajaria told that it has increased its investments in the e-commerce business by automating various processes and increasing the team size during the quarter. These investments has kept the margins under pressure, although they hope to report higher revenues and profits in the subsequent quarters.
E-Commerce Business: 123Greetings Store, the company’s online gifting e-commerce business shipped a total of 88,348 orders during the quarter, registering a significant 71.4% increase from 51,546 orders in the same quarter last year.
The store recorded an average of 1821 orders per day, up from 560 orders per day in the same quarter last year. This was from an active base of 881 vendors, up from 389 vendors in Q3-FY13. It has listed 123,111 products on its website and various marketplaces as of December 31, 2013.
Mobile Offerings: With mobile visitors doubling year-on-year to 7.77 million for the quarter, it looks 123Greetings is now focusing on its mobile offerings. The company launched mobile apps on Android and iOS during the quarter and claims that over 70,000 e-cards were sent by users through these apps.
123Greetings also mentions that it has strengthened its technology and content delivery capabilities to serve users on its mobile website and apps, enabling them to view over 40,000 e-cards, including flash ecards, on handheld devices.
123Greetings Studio: 123Greetings Studio delivered 1,682 additional e-cards during the quarter, a 2.5x increase from 671 cards in the same quarter last year. It also grew its regional and International language content library with 118 new e-cards across Hindi, Russian, Mandarin, Spanish and German languages for key holidays and occasions.
Intrasoft spent Rs 37.6 crore towards product and content development in this quarter, a significant 97.2% increase from Rs 19.07 crore allocated in the same quarter last year. It spent Rs 7.18 crore towards sales and marketing this quarter, up 68.54% from Rs 4.26 crores in the same quarter last year.
The employee costs went up to 3.26 crore, up 181.03% from Rs 1.16 crore in the same quarter last year while the general and administrative expenses increased by 92.6% to Rs 2.6 crore from Rs 1.35 crore. The depreciation cost declined by 39.02% to Rs 1.25 crore from Rs 2.05 crore in the same quarter last year.