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
- Regulation around Discounting
- Stiff Discounting to acquire and retain userbase
- Hiring Named and Famed professionals without any defined Roles
- 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
- Left and right acquisition without clear vision on Integration and synergy
- Product Quality sold on their portal
- All e-commerce companies fighting for the limited number of userbase and In India; e-Commerce centric userbase is not more than 140 Million
- Problem around order something and receive something dented their image
- Their main revenue stream relied on Electronics and that too Smartphones supported by heavy discounting by e-commerce sites
- Lack of Innovation and Cross Collaboration
- 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.
