Intrasoft Technologies Ltd Management Discussions.

Management discussion and analysis


The global economy contracted 3.3% in 2020, largely due to the outbreak of the novel coronavirus and suspension of economic activities across most countries.

Regional growth % 2020 2019
World output (3.3) 2.9
Advanced economies (4.9) 1.7
Emerging and developing economies (2.4) 3.7

(Source: IMF)

Performance of some major economies

United States: The country witnessed a GDP de-growth of 3.5% in 2020 compared to a growth of 2.3% in 2019.

China: The countrys Gross Domestic Product grew 2.3% in 2020 compared to 6.1% in 2019 despite being the epicentre of the outbreak of the novel coronavirus.

United Kingdom: Britains GDP shrank 9.9% in 2020 compared to 1.4% growth in 2019, 2x the annual contraction recorded in the aftermath of the global meltdown in 2009.

The global economy is projected to grow by 5.5% in 2021 largely due to the successful roll-out of vaccines across the globe, coupled with policy support in large economies.

(Source: CNN, IMF, Economic Times, trading economics, Statists, CNBC)

Economic overview of United States of America

The Gross Domestic Product of United States decreased 3.5% in 2020 compared with an increase of 2.3% in 2019. The decrease in GDP in 2020 reflected declines in exports, private inventory investment (retail trade and wholesale trade), imports, nonresidential fixed investment and the impact of the global pandemic. The US is the worlds leading economy with Gross Domestic Product of USD 20.9 trillion in 2020, representing 15.98% of the global economy. The GDP per capita of United States was USD 63,051 in 2020 compared to USD 65,456 in 2019. Annual inflation was 2.6% in March of 2021 from 1.7% in February, slightly above market forecasts of 2.5%, the highest since August 2018.

As of January 2021, the U.S. government unveiled a recovery plan worth USD 1.9 trillion to robust the manufacturing and the housing market. The U.S. manufacturing industry made significant adjustments to stay prosper in spite of the impact of Covid-19. Businesses in this industry are changing course and capitalizing on new shifts in market demand and consumer preferences.

US unemployment declined to 6% in March 2021 from 6.2% in the previous month, the lowest in a year and in line with market expectations. The rate fell steadily in recent months after reaching an all-time high of 14.8% in April 2020. The number of unemployed people fell by 262,000 to 9.71 Million while the number of employed rose by 609 thousand to 150.85 Million as of March 2021.

(Source: Times of India, Trading Economics, www., BusinessToday, Knoema, Statista)

Global e-commerce and retail overview

Global e-commerce sales were USD 4.28 trillion in 2020 compared to USD 3.53 trillion in 2019 and projected to grow to USD 5.4 trillion by 2022.

The global retail market is expected to grow to USD 22.44 trillion in 2021 at a compounded annual growth rate (CAGR) of 10.5% from USD 20.29 trillion in 2020. In 2020, e-retail penetration was on the rise with online share at 18% of the total global retail sales and projected to reach 21.8% by 2024. The retail market is expected to reach USD 29.36 trillion in 2025. Asia Pacific was the largest global retail market, accounting for 35% of the total market in 2020. North America was the second largest, accounting for 29% of the market.

North America possessed the highest internet penetration (90.3%) as of January 2021, followed by Europe (87.2%), Middle East (70.8%) and Asia (55.1%). The global B2C e-commerce market size was valued at USD 3.67 trillion in 2020 and expected to expand at a CAGR of 9.7% from 2021 to 2028. The growth can be attributed to rising disposable incomes, growing global per capita income and deepening internet penetration. As of February 2021, 2.14 Billion people shopped online, which was 27.6% of the global population.

The e-commerce industry is expected to emerge as the largest retail channel in the world, surpassing retail sales from supermarkets, independent grocers, and apparel and footwear retailers, among others. E-commerce marketplaces or online shopping platforms are increasingly popular as customers can easily access a wide number of products at lower prices coupled with doorstep delivery. In 2020, countries with the highest ecommerce activity comprised United Kingdom (87% population brought online), Sweden (84%) with Germany and the Netherlands (83%).

(Source: Prnewswire, Grandviewresearch, Oberlo. in, Saleslayer, Statista)

The leading global marketplaces

Region Marketplaces
North America 52
Asia 22
Europe 19
Latin America 5
Middle East/Africa 2

How top 100 marketplaces grew, 2020

2020 GMV growth Marketplaces
>100% 14
50.1-100% 20
30.1-50% 17
15.1-30% 31
0-15% 14
< 0% 4

(Source: Digital Commerce 360)

As of Technologies driving e-commerce


Blockchain is a system of recording information that makes it difficult or impossible to change, hack or cheat the system. Blockchain makes transactions safer and faster. This technology enables users to share and securely store digital assets automatically/manually. It has the capacity to handle user activities such as payment processing, product searches, product purchases and customer care. Hence, e-commerce sites integrate robust data-encryption software to keep consumers personal data safe from cyber criminals.

Artificial intelligence: With the help of AI technology, e-commerce websites can make smarter product recommendations and enhance customer experience. AI will help e-commerce businesses analyze trends with sales channels and buyer behaviour to ascertain the best time, price and place to list their products.

Augmented Reality/Virtual Reality:

With this technology, shoppers can visualize products. With VR technology, online stores offer in-store experience and greater detail to help customers make the right decisions.

Data analytics:

Data analytics harnesses large data derived from marketplaces to identify hidden patterns, trends and customer preferences.

US e-commerce industry overview

US e-commerce sales were estimated at USD 861.12 Billion in 2020, compared to USD 523.64 Billion in 2019, an increase of 44%. Online share of total retail sales in US stood at 21.3% in 2020 compared to 15.8% in 2019. Ecommerce accounted for approximately 101% of all gains in the retail sales in 2020, which means that sales through all other channels like stores, catalogs and call centers declined, the first time that ecommerce sales accounted for all retail sales gains (previous high in 2008 of 63.8%).

(Source: Digital Commerce 360) (As of Jan,2021)

Emerging trends in the US e-commerce industry

Progressive web apps (PWA):

One of the key trends in the e-commerce industry is the use of PWA, a website that has the form of a mobile application. Instead of developing and launching high-cost native mobile apps, eCommerce businesses can take advantage of PWAs to provide a better mobile experience, improve sales and enhance the customers online experience.

Multi-channel selling:

Multichannel selling refers to the process of selling merchandize on more than one sales channel. Multichannel management is all about moving beyond the website and exploring channels such as marketplaces, social media and comparison-shopping engines. Selling on multiple sales channel(s) increases exposure to potential customers, which increases sales opportunities.

Subscription services: Millennial and Gen Z consumers are less passionate about owning things, preferring renting or making recurring purchases. This is where subscriptions come into play, providing benefits like free delivery, personalized product boxes and others. The subscription model in retail helps e-commerce businesses increase their sales and get lifelong customers loyal to their brand.

Holiday sales: Online shopping over the 2020 holidays in the United States grew by 32.2%, totaling USD 188.2 Billion as compared to USD 143.8 Billion in 2019. Also, online spending exceeded USD 1 Billion daily during the 2020 holiday season.

(Source: Adobe Analytics)

Black Friday and Cyber Monday:

Black Friday is an informal name for the Friday following Thanksgiving Day in the United States, which is celebrated on the fourth Thursday of November and is one of the biggest sales days of the year. These are two of the biggest sales days of the year, marked by attractive discounts and large purchases. E-commerce sales during November 2020, which included Black Friday and Cyber Monday, reached USD 100 Billion for the first ever time.

(Source: CNBC)

Growth drivers of the US e-commerce industry

Increasing smartphone penetration:

Smartphones increase convenience and provide easy access to information regarding products, shipping, and delivery status. Enhancement of GPS tracking features in smartphones enables users to track product deliveries. As of February 2021,85% of the population of United States owned a smartphone. An increase in smartphone usage enabled e-commerce companies to reach a wider customer base, one of the major factors of e-commerce market growth.

(Source: PewResearch)

Advanced technologies: Big Data Analytics, artificial intelligence and machine learning have benefitted e-commerce. BDA, with machine learning, allows the identification of optimal price, determination of the most profitable customer category and related goods, and helps decide the ideal inventory. AI helps in capturing data from all avenues (social media, chatbots, customer service interactions and mobile messaging), fed into a BDA software to facilitate accurate data analysis.


Mobile e-commerce, also known as m-commerce, refers to online purchasing transactions that utilize devices such as smartphones, tablets, or laptops. Various technological improvements such as better connectivity and voice-activated shopping have strengthened mobile shopping. As of November 2020, 45.38% of web traffic in the United States originated from mobile devices. M-commerce in the United States is expected to increase to USD 448 Billion by 2024 and projected to surpass USD 432 Billion by 2022. (Source: Statsta)

Millennials contribution: Millennials (82.22 Million) overtook Baby Boomers (68.70 Million) in 2020 as Americas largest population group. Approximately 91% of millennials prefer to shop online, with only 9% choosing to shop in-store. Millennials value access to goods and services over ownership, prompting the growth of a sharing economy

(Source: Lexingtoniaw, Knoema)

Increasing e-retailers: There are 7.9 Million online retailers in the world and 2.1 Million based in United States as of 2021.

Internet penetration: The internet usage penetration in the United States stood at 284 Million users in 2020 and projected to grow to 296.7 Million internet users by 2025.

(Source: Statista)

Gen Zs influence: Gen-Z (86 Million approximately) overtook Millennials by nearly 4 Million to become the largest generation in the United States in 2020.

(Source: Knoema)

Company overview

IntraSoft Technologies Limited operates as a leading e-commerce retailer in USA and enjoys a remarkable presence across major online marketplaces like Amazon and eBay. The Company works with brand partners and offers products under various categories such as home & kitchen, garden & outdoor, beauty & personal care, baby products, toys & games, tools & home improvement, among others. The Companys operations are centered around the prudent use of technology, comprising proprietary web-based solutions to fulfill millions of orders across the US with speed and efficiency. The Companys marketplace credentials, wide product assortment, competitive pricing, timely delivery to customers, efficient demand fulfillment and prompt marketplace customer service has enhanced our brand in the US e-commerce industry.

Business performance, 2020-21

The COVID-19 pandemic induced phased lockdown across the globe impacted businesses severely. The pandemic, social distancing and staying home has accelerated the shift in the purchase habits of consumers from offline to online. In the burgeoning world of e-commerce that is dominated by global online marketplaces, IntraSoft plays a crucial role of bridging the gap between marketplaces that are customer-focused and vendors that are product focused. Through a deep understanding of customers buying patterns that has been enabled by our technology platform and demand forecasting capability, the Company ensures a wide range of product selection for the marketplace customers.

We are confident of business success, as Home and Garden, one of our key categories in which we have developed competitive advantages, is seeing an accelerated online shift. Our investments in technology during the last two financial years have allowed us to scale during these unprecedented times despite facing disruption in supply-chain. The Company will continue to proactively invest in our future.

Over the last two years, we shifted focus from scaling the business to evaluating and optimizing our existing brand portfolio.

Financial overview

The Companys consolidated Profit and Loss Account for the year ended 31 March 2020 is provided below:

Consolidated Statement of Profit and Loss for the year ended 31 March 2021

Amount (Rs. in Lacs)
Particulars Year ended 31 March 2021 Year ended 31 March 2020
Revenue from operations 61,313.38 59,067.54
Cost of goods sold (incl. shipping) 49,741.89 48,899.29
Gross Profit 11,571.49 10,168.25
Sales and marketing expenses 7,860.08 6,637.98
Employee benefits expense 1,677.32 1,566.92
General & Administration Expenses 1,194.51 1,272.24
Earnings from Operations 839.58 691.11
Other Income (Net) 635.16 485.42
Earnings Before Interest, Tax, Depreciation & Amortisation 1,474.74 1,176.53
Depreciation & Amortisation 281.65 409.43
Earnings Before Interest & Tax 1,193.09 767.10
Finance Costs 325.14 553.87
Profit Before Tax (PBT) 867.95 213.23
Tax Expense 33.68 2.36
Profit After Tax (PAT) 834.27 210.87

On a standalone basis, Debtors Turnover increased from 77.02 to 944.08; reason being the fall in Trade Receivables vis-a-vis Revenue from Operations. Net Profit Margin increased from 17.23 to 46.05; reason being the increase in Revenue from Operation and Other Income and a decrease in operating expenses.

Risk management

Continuous upgradation of Technology

The Companys operations are driven by technology, and therefore our failure to innovate, adapt or respond effectively to the rapidly changing technology and market needs, could impede our ability to function efficiently.


The Company pro-actively invests in technology upgradation and improvement to strengthen its value proposition to brand partners, adapt to the dynamic market requirements and maintain its competitive advantage.

Festive season demand

The US festive season falls in the third quarter of our financial year, leading to greater e-commerce revenue in the quarter vis-a-vis other quarters. In the event of any operational bottlenecks or infrastructure constraints, we may not be able to take advantage of the festive demand.

Mitigation: The Companys backbone is its proprietary technology, which enables the Company to efficiently service the demand spike in the third quarter of the fiscal. This allows the Company to scale in line with the increased festive season demand.

The continuing effect of the COVID-19 pandemic and its unprecedented nature

Restricted physical movement of employees owing to decisions made by local authorities, governments or public health bodies owing to the COVID-19 pandemic, impacts business functioning. Furthermore, in the event any member(s) of our management or operations team contract COVID-19, it may potentially affect our operations.


The Companys employees have adapted to new processes and protocols to serve clients (brand partners). The teams, both in India and the US, will continue to work remotely across the foreseeable future, and are well equipped to do so as our technology scales on the cloud. We will continue to monitor the impacts of the pandemic, if any, and take necessary steps to ensure smooth business functioning.

Internal control systems and their adequacy

Our integral and robust internal control system ensures efficient utilisation and conservation of resources, compliance with policies, procedures and statutory requirements. The Company has developed well-documented regulations and guidelines for authorisation and approvals. Internal audit is a crucial backbone of the internal control systems and it is conducted on a regular basis to check and authenticate that all systems and processes are in compliance with the relevant guidelines and appropriate in safeguarding the assets from unauthorized use or losses. An Audit Committee of the Board evaluates the existing internal control systems, ensures compliance and takes corrective measures as and when required. The management also regularly reviews all vital processes and control systems which strengthens the organisation. The emphasis on internal controls is imposed across all units, departments, functions and processes. All the measures are undertaken to ensure that the controls implemented are both adequate and equivalent with the size and nature of our operations.

Human resources

The Company believes that its intrinsic strength lies in dedicated and motivated employees. The Company provides competitive compensations, an amiable work environment and acknowledges employee performance through a planned reward and recognition programme. The Company aims to create a workplace where every person can achieve his or her true potential. The Company encourages individuals to go beyond the scope of their work, undertake voluntary projects that enable them to learn and devise innovative ideas. The Group employed 82 individuals as of 31st March 2021.