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QuickCart
Your client is QuickCart, a hybrid e-commerce retailer with three segments: Marketplace, 1P Retail, and Advertising. The tables show Revenue and Costs for 2024 and 2025 (US $ millions), plus totals.
What was primarily responsible for the decline in total profit from 2024 to 2025 — which segment(s) and was it due to revenue decline, cost increase, or both? Provide a brief justification using rough math.
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📋 Solution:
QuickCart
- Totals: 2024 profit = 16,500 − 11,500 = 5,000; 2025 profit = 16,800 − 13,500 = 3,300 → decline of 1,700.
- Driver check: revenue up +300; costs up +2,000 → the drop is cost-driven.
- By segment (profit change):
- 1P Retail: −700 (costs +1,400 vs. revenue +700; margin collapses from ~10% to ~1%).
- Marketplace: −600 (revenue −200 and costs +400).
- Advertising: −400 (revenue −200 and costs +200).
Answer: The profit decline is primarily due to a surge in 1P Retail costs, with additional smaller hits from Marketplace and Advertising.
