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E-commerce value creation story in india will end shortly.....
#1

  1. 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.
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#2
I am a believer of "Ecommerce is all about convenience" philosophy. Its for those people who can not find quality products in their neighborhood or for buying things that are not available in local market. It's this Flipkart,Amazon,Snapdeal,Ebay,Infibeam combo who spoiled everyone. How long one can give 60-70% discounts without artificially inflating prices ?. How on the earth this free shipping on stuff worth Rs. 60-70 (e.g Amazon Prime) is even possible ?. Amazon may have profits from cloud and other businesses to offset this loss.

People have been used to this Free & Discounts bullshit and its not easy to convert them. This unethical practice should end.
[-] The following 1 user says Thank You to Sai Sanvish for this post:
  • Kush Agarwal
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#3
I agree completely with this philosophy. But i would like to add to it. Flipkart, Snapdeal etc have helped create a market where people have started this medium of convenience. Ebay could not do this for years.

Indian consumers need some lucrative thing in order to create a swarm.

Now as the industry has matured, and a market has been created, they should stop their parasite behaviour, and focus on maintaining and organically building this market.

I am saying this today, in a few months time, snapdeal will not remain in ecommerce related to goods.
In a few years, Flipkart will either move to selling only own products, thereby increasing the working capital, or merge with some other company.

But these both will always be remembered as the creators of a new market.



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