Indian E-Commerce companies are
going through the transformation phase as per my view. The investors pulled
back with their wallet and now more demanding with these companies to be self
reliant instead of relying on cash burn to gain userbase as well as market
share.
We all know that around 60 to 70%
of their GMV is coming from Electronics segment predominantly from Smartphone
segment. The fall in funding and more pressure to make the organization EBITA
positive, E-Commerce companies in India are cutting down commission to discount
which is making them less attractive for consumer to sellers on the portal. We
must note that many of the retailer took an advantage of E-commerce portal and
used as a platform to sell their idle inventory without making any losses.
The change in E-Commerce
companies dynamics will have direct impact on Smartphone companies relying
heavily on E-Commerce companies for their sale while appointing 3rd party servicing
outlets. On a contrary the established home grown Smartphone player's are going
to regain the market share in the second half of FY17. The home grown
Smartphone player posses strong retail presence as well as relationship and
stood with the retailer when the onslaught was going on.
The loss of market share by
E-commerce companies in total Smartphone sell through percentage will also
impact E-Commerce companies valuation as their chunk of GMV comes from
Electronics section.
