The Ongoing Indication from Indian e-Commerce - Consolidation is Inevitable


Most of the e-commerce companies are making round of news for all wrong reasons. The latest one is the delay in honoring their commitment to Campus selected student into professional world. The even interesting part of lack of communication from e-commerce companies with proper answer to such universities so that universities plan for the alternative for their budding high quality brains. It seems that e-commerce companies started a feel that by the end of 2015 that they are governing the economics of India and went from humble to arrogant mode.

In my point of view, recent regulation and missteps landed them in a soup

  1. Regulation around Discounting
  2. Stiff Discounting to acquire and retain userbase
  3. Hiring Named and Famed professionals without any defined Roles
  4. Very high attrition rate is very high as experienced resources donot need Brand but Brand needs them and hence many of them left abruptly and all project running under them went underwater
  5. Left and right acquisition without clear vision on Integration and synergy
  6. Product Quality sold on their portal
  7.  All e-commerce companies fighting for the limited number of userbase and In India; e-Commerce centric userbase is not more than 140 Million
  8. Problem around order something and receive something dented their image
  9. Their main revenue stream relied on Electronics and that too Smartphones supported by heavy discounting by e-commerce sites
  10. Lack of Innovation and Cross Collaboration
  11. Lavish expenditure on Offices and resources. Recently many e-commerce companies announced that they are closing their office in tier 2 and Tier3 cities
It lands us to think that E-Commerce companies relies mainly on metros and sub-metros cities based userbase. Also concluded that retention of the userbase is very low and also the process of registration with their applications to portal is bit cumbersome as per the Indian user standard. The stiff competition and continuing discounting as well as in/out acquisition of companies coupled with many investment landed them in cash crunch.

When they thought of raising the fund and started preparing for the same; Analyst firm started marking down their valuation and put them in Cat and Mouse game.

In my point of view, 90% of the Indian e-Commerce companies will ultimately land into closure mode and rest of them will be forced to join hands to survive. They must also realize that most of the Indian State imposed taxes on their shipped products and in-turn the last mile benefit offered by e-commerce companies coming to an end and they must think of alternative revenue to be viable in the market place. We all should introspect that why our e-commerce companies are not making profits whereas the international e-commerce companies operating in other countries making profits. It's better to join hands and fight collectively instead of fighting internally.

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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