Sugar, a leading online fashion platform for women, has reported a remarkable growth in its income and profitability for the fiscal year ending March 2023. The company has attributed its success to its strong customer base, product innovation, and operational efficiency.
Sugar’s revenue crosses Rs 500 crore mark
Sugar’s revenue for FY23 stood at Rs 508 crore, which is an 89% increase from Rs 269 crore in FY22. The company’s gross merchandise value (GMV) also grew by 82% to Rs 1,021 crore in FY23 from Rs 561 crore in FY22. Sugar’s revenue and GMV growth outpaced the industry average of 40% and 50%, respectively.
Sugar’s revenue and GMV growth are impressive, considering the challenges posed by the Covid-19 pandemic and the subsequent lockdowns. The company managed to retain and acquire customers by offering a wide range of products, including apparel, accessories, footwear, and beauty products, at affordable prices. Sugar also launched its own private label, Sugar Style, which contributed 15% to its revenue in FY23.
Sugar’s profitability improves significantly
Sugar’s profitability also improved significantly in FY23, as the company reduced its losses by 48% to Rs 55 crore from Rs 106 crore in FY22. The company’s EBITDA margin improved to -11% in FY23 from -39% in FY22. Sugar’s profitability improvement was driven by its operational efficiency, cost optimization, and better unit economics.
Sugar’s operational efficiency improved as the company increased its order fulfillment rate to 97% in FY23 from 92% in FY22. The company also reduced its return rate to 18% in FY23 from 22% in FY22, which helped in saving logistics costs and increasing customer satisfaction. Sugar’s cost optimization measures included rationalizing marketing expenses, optimizing inventory, and leveraging technology. Sugar’s unit economics also improved as the company increased its average order value (AOV) to Rs 1,200 in FY23 from Rs 1,000 in FY22, and its repeat purchase rate to 55% in FY23 from 50% in FY22.
Sugar’s future plans and outlook
Sugar’s co-founder and CEO, Divya Gokulnath, said that the company is confident of achieving profitability and becoming a unicorn in the next two years. She said that the company is focused on expanding its product portfolio, customer base, and geographical reach. She also said that the company is exploring various fundraising options, including an IPO, to fuel its growth.
Sugar’s future plans include launching new categories, such as lingerie, activewear, and home decor, and increasing its product assortment to over 1 lakh SKUs by FY24. The company also plans to increase its customer base to 20 million by FY24 from 12 million in FY23, and its geographical reach to over 20,000 pin codes by FY24 from 15,000 in FY23. The company also aims to increase its contribution from tier 2 and tier 3 cities to 60% by FY24 from 45% in FY23.
Sugar’s outlook for FY24 is positive, as the company expects to grow its revenue by 100% and its GMV by 80%. The company also expects to reduce its losses by 50% and improve its EBITDA margin to -5% in FY24.
Sugar is one of the fastest-growing online fashion platforms for women in India, and has emerged as a strong contender in the highly competitive e-commerce space. The company’s impressive performance in FY23, despite the pandemic-induced challenges, reflects its resilience and innovation. Sugar’s future plans and outlook indicate that the company is well-positioned to achieve its profitability and unicorn goals in the near future.
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