23-08-2016, 04:49 PM
- E-commerce value creation story in india will end shortly, if the current players continue to work on the flawed business models as their primary focus is to raise money at unrealistic valuations.“Losing Money to establish leadership” approach has made these companies report losses of thousands of crores. It is hard to believe that the most prolific investors in the indian venture capital space are funding these companies despite their flawed business model but the big question is till when???With the launch of “DIGITAL MALL OF INDIA” in the online shopping space early next year, VC analysis/assumptions and all other calculations will go out of the window as it will bring a retail revolution in india. Working on a model with zero commission and no revenue sharing vis a vis competition who charge heavy commission from suppliers/vendors, will change the market dynamics completely. Brainchild of an ExCitibanker, it will create a situation where the current market players funded by VCs with deep pockets will be in trouble as commission income which is their major source of revenue will get hit big time.The statement from the promoter that “we are here to make money and not burn money” like competition tells you the story.