Looking ahead, there are a few things which can help grow this sector. The mobile is perhaps the biggest opportunity. But the inability to do payments on mobile is a big constraint. RBI needs to step in and fix the rules and help the ecosystem simplify payments on the mobile dramatically. I have maintained that one cannot treat small payments (say, less than Rs 500 or 1,000) the same way as the larger ones. Smaller payments need to be simplified so that transactions can be easily completed on the mobile.
Second, there will perhaps be some consolidation and combination between offline retailers and their online brethren. The offline retailers can now pick up some of the eCommerce companies that may not be doing so well, and leverage them into building their own significant presence online.
Third, the entry of international players like Amazon will up the ante for the Indian players who will need to then make a decision of whether to sell or stay. Either way, the sector will expand, and so will the offerings and the service.
So, in the short-term, there will be some pain as we hear about the bubble bursting. Don’t worry about that. What is happening is that a new industry has been created that will forever change the way Indians shop and buy. And that is good for businesses, investors and entrepreneurs.
4 responses so far ↓
1 Chas // Mar 2, 2012 at 10:56 am
Will Indians embrace Mobile Gold buying Apps, as long as they pertain to coins or bullion and not jewelry? I suspect that jewelry will still be something that one wants to inspect close-up.
2 Indrajit Dutta // Mar 28, 2013 at 11:22 am
Backend logistics and cash burn are two issues which will continue to bog down this sector. e-commerce sure has bright future as we have seen in last few years. but this growth needs to be built on solid foundations and not just discount coupons and flash sales!!
3 Rahul // Apr 4, 2013 at 3:05 pm
Initially i thought like what an idea sirji…for these e-retailers. But I am still not sure why are they losing money. If flipkart is boasting of revenues of over 1500 crs, even a decent 10% margin would earn them cool 150 crs…Now if their operational cost is 150 crs, then I would say just shut the shop and enjoy the life
4 Mohit // Apr 4, 2013 at 3:07 pm
Initially i thought like what an idea sirji…for these e-retailers. But I am still not sure why are they losing money. If flipkart is boasting of revenues of over 1500 crs, even a decent 10% margin would earn them cool 150 crs…Now if their operational cost is 150 crs, then I would say just shut the shop and enjoy the life
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