Amazon for the last six month
showed their calibrated onslaught on Indian e-Commerce startup with open wallet
and changed the dynamics of Indian E-Commerce segment. The downturn in funding
to e-Commerce companies and valuation marked down by many investor led investor
confidence loss on the business model of
Indian e-Commerce companies which relies on discount to generate sale.
The burn rate of Indian
E-Commerce segment is too high and there is no profitability in sight. Flipkart
lost many high profile resource whereas Snapdeal faced increasing challenge to
attract big names to use their platform. It's not important that how many
sellers are there on the platform but its more important that how the brands
are getting attached with the platform.
Based on the newpaper report,
SnapDeal embarked 200 Crore to go for brand facelift so that they attract
brands on their portal. It's a fact that most of the e-commerce companies are
generating most of the GMV through electronics and the competition is so
intense that the chance of profitability is near to zero but to ensure that
user buys the product from the platform, e-commerce companies are offering
discounts.
SnapDeal also bought many
analytical companies to recharge companies in order to integrate it with the
central platform to differentiate themselves from the competitors but they
failed to achieve the same for one or another reason. They completely failed to
monetize their platform through alternative revenue stream and i should say
that all the e-commerce companies in India failed in that segment.
The much delayed advertisement
blitz is not going to help SnapDeal much to change their fortune but they can
do so if they invest half of the embarked budget in enhancing their platform
and go full blown user acquisition in disruptive model.
I would love to see Indiane-Commerce companies grow and be successful but the prospects are bleak as the
number of buyers on e-commerce portals are limited and still retail segment is
very strong.
Even though I wish SnapDeal all
the best and hoping that they will come back strongly.
