wordpress blog stats
Connect with us

Hi, what are you looking for?

Instamojo is close to profitability but needs to keep an eye on competition

Instamojo, a platform which allows users to buy and sell their digital goods, has said that it is close to cashflow break-even. In a blog post, its Founder and CEO Sampad Swain writes that "We are at a stage where we can think profitably without making a trade-off between business growth and our burn rate. In simple words, we will continue posting strong growth numbers Q/Q without compromises." Where have I heard this before? Typically about Info Edge owned marketplaces: it's something the company used to say often about 99Acres, before competition started heating up, and even Jeevansathi; more recently, we heard similar comments from them about Zomato. What's interesting here is that the business reaches a level where profitability depends on an increase or decrease in marketing spends. Swain writes, on customer acquisition costs: "Unlike many other businesses, Instamojo’s growth is not hinged on advertising & marketing to acquire users. We depend on WoM (word-of-mouth) and referrals which is purely derived from the inherent network effects which our platform enjoys." "As we add more merchants to our platform, we expect our CAC (customer acquisition costs) to go close to Rs 0 (currently at low double digits) which is a huge competitive advantage and perhaps our absolute economic moat," Swain added.  From the blog post, Gross Margin is up 191%, Contribution margin is up 565%. Operating margin is up 93%. 4% increase in expenses. -57% decline in advertising and marketing spend. 76% decline in customer acquisition costs. That close-to-profitability scenario…

Please subscribe/login to read the full story.
Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

Studying the 'community' supporting the late Sushant Singh Rajput (SSR) shows how Twitter was gamed through organized engagement

News

Do we have an enabling system for the National Data Governance Framework Policy (NDGFP) aiming to create a repository of non-personal data?

News

A viewpoint on why the regulation of cryptocurrencies and crypto exchnages under 2019's E-Commerce Rules puts it in a 'grey area'

News

India's IT Rules mandate a GAC to address user 'grievances' , but is re-instatement of content removed by a platform a power it should...

News

There is a need for reconceptualizing personal, non-personal data and the concept of privacy itself for regulators to effectively protect data

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ