Monthly Archives: January 2017

Ecommerce Profits

ecommerce-profit

E-commerce in India is struggling to gain profits because of high discounts, promotions and investment on employees.

According to sources, more than Rs.10,000 Crores of loss were reported by India Top 20 e- commerce companies that are into retail, furniture,  travel & food orders, which is whooping 138% more losses reported in last Financial year. The Top 3 India e-commerce companies Amazon India, Filpkart & Paytm contributed 70% of losses.

Amazon India has burnt more than 2000 Crores on Ads And Paytm & Filpkart put together has spent almost the same amount for gaining the market share, specially at the time of Indian Festive season. Such massive cash burn by these e- commerce companies are only to gain the market share.

It is estimated that there are around 35 million buyers are shopping online and this is bound to increase by multi-fold in next 5 years as the convenience of having goods delivered to their doorsteps, these cash rich or cashless E-commerce companies are investing in Ads / Promotions  and freebies with a simple math that if 100 million buyers buying one product each from their site with a margin 10/- per Order will clear all there loss in one GO.

May be investors are not showing interest or valuation of these companies are going down but with the consolidation and reduced competition in next 3 years, these companies are expected to reach their previous glory and will be profitable forever till another technology revolution

Impacts Of Demonetization On Ecommerce

impacts of demonetization on Ecommerce

As e-commerce companies are spending huge money across our country, they are experiencing the remarkable growth on online markets. With e-commerce expansion at a hopeful stage, the markets will reach their heights of improvement. However, the economic strategies in the country can impact growth on business. In an unexpected and unforeseen move on November 8 2016, the Indian government implemented that high value notes of Rs 500 and 1000 will be banned and it reduces use of 86% currency in circulation, creating a cash crisis in the economy. In India nearly 90% of transactions are carried out in cash. It is bold move to transform the nation in to a cashless financial system. This move is on both stopping  corruption , reducing the “black money” and to  bring on  more digital payment systems.

Experts consider that demonetization might impact the nation’s economic growth much in the short period of time. Ambit capital a well known research company in India has its growth GDP of 7.3% in the past financial year ,had drastically reviewed its opposing GDP to  5.8% for the fy18 .This currency crunch has shook a several businesses and can have a significant impact on the” cash on delivery” model of e-commerce companies in India. About 70% of online shoppers, in India including big giants of ecommerce adapt for cash while buying a product. The cash payments are more often done for high value products where the unaccounted “black money” is spent on luxuries. While, online shopping companies have seen a rush in revenues with the demonetization move as customers are looking to buy the necessary goods through digital payments. Gross business value of other high value properties is likely to be damaged negatively .According to research, the cash banning will bring  the “cash on delivery” share of e-commerce sales goes down and increase the online payments .