By Disha Acharya

Copyright indiatimes

Ecommerce major Flipkart and its fashion arm Myntra’s financials for fiscal 2025 show how their fast-growing advertising business is driving revenues. Their combined ad revenues rose 27% to Rs 7,232 crore in FY25, according to filings with the Registrar of Companies (RoC).Flipkart Internet, the marketplace arm of Flipkart, reported revenues of Rs 20,493 crore, up 14% year-on-year (YoY), while net losses narrowed 37% to Rs 1,494 crore. During the same period, Myntra’s operating revenue rose 18% to Rs 6,043 crore, and its net profit surged nearly 18 times to Rs 548 crore from Rs 31 crore in FY24.The numbers are partly due to the rise in ad revenues — a trend seen not just at Flipkart and Myntra, but also at Amazon and quick commerce platforms.ETtech explains why this matters for etailers.How do these platforms work?Flipkart and Myntra operate on a marketplace model, where third-party sellers list and sell products — similar to Amazon.Direct-to-consumer (D2C) brands and other sellers join these platforms for their large customer base and tech infrastructure. In return, the platforms charge fees or commissions, typically between 5% and 25%, depending on the product category.But with competition in the marketplace, brands also pay extra for visibility. Flipkart and Myntra offer options like sponsored posts, banner ads, and title sponsorships for festive sales.What’s driving the ad boom?Flipkart Internet’s ad revenue grew 27% to Rs 6,317 crore in FY25 from Rs 4,973 crore in FY24. Myntra’s rose 28% to Rs 914.5 crore from Rs 712.3 crore a year earlier.“Ecommerce platforms are prioritising ad revenue after seeing Amazon’s growth over the past decade,” said Satish Meena, a Gurugram-based analyst. In FY24, Amazon Seller Services had posted a 24% increase in its ad revenues at Rs 6,649 crore, up from Rs 5,380 crore a year ago. It is yet to post its results for fiscal 2025.Shifting consumer behaviour for research and shopping is driving brands’ focus on this. “With consumers shifting from Google and Meta to apps and websites to search for products, brands want to tap into the opportunity by showing up higher on the list,” Meena said.Ecommerce majors are launching new tools and tech to offer new avenues for advertising. For instance, Amazon India has launched MX Player, an OTT streaming service that allows it to show ads between shows.Over the past year, Flipkart and Myntra have launched live commerce, short videos, micro dramas, product videos, and more as part of their marketing toolkit. These feature products of partnering brands.Why does this matter?While seen as an ancillary source of revenue, income from advertisements is highly profitable for these platforms — with around 90-95% of the revenue flowing straight to the company’s bottomline. This assumes significance as these companies look to trim their losses. Flipkart’s parent company Walmart highlighted that increasing investment in India’s fast-growing quick commerce market through Flipkart and Myntra is affecting its gross profit in Q2 FY25.To put things in perspective, in the absence of its Rs 914.5 crore ad revenue Myntra would have recorded a loss of Rs 366 crore for FY25.For these consumer internet companies, advertising has become a lucrative part of the business. Clearly, the ad revenue has surged in the past few years thanks to faster digital penetration and growth in tier III and tier IV markets. Earlier, ET had written in depth on the rapid growth in ad revenue on quick commerce platforms, which are burning cash to expand. For FY25, Blinkit and Zepto made around Rs 1,000 crore each from ads, according to people in the know.