oppn parties Shake Up in Ecommerce Marketplaces & Startups

News Snippets

  • Citizenship Bill to be tabled in the Lok Sabha today. Heated debate likely
  • Domestic tourism in Kashmir slumps by 87% in August-November period
  • Prime Minister Modi says police must make women feel safe
  • West Indies beat India by 8 wickets in the second T20 at Thiruvananthpuram
  • Rahul Gandhi says the NDA government kept Chidambaram in jail for so many days in order to take revenge
  • Kohli reclaims the top spot in ICC rankings from Steve Smith
  • Cabinet clears the Citizenship Bill. It will be placed in the Lok Sabha in a day or two
  • Hindu Jagran Manch members clash with the police in Kolkata after being refused permission to take out a rally
  • West Bengal Governor Jagdeep Dhankar says important files were sent late to him and his delay in signing them draws criticism from the TMC. It also brings the state assembly to a halt
  • 92,000 BSNL & MTNL employees apply for early retirement taking advantage of the new government offer. It will result in an annual savings of Rs 8.700 cr for the merged entity
  • Dengue deaths multiply in Kolkata even as the CM, Mamata Banerjee, asks the opposition not to politicize the matter
  • Government orders inquiry into the breach of security at Priyanka Vadra's house
  • Chennai-based engineer Shanmuga Subramanian helps Nasa find the pieces of Vikram lander on the Moon's surface
  • New Maharashtra CM Uddhav Thackeray says his administration will take back cases against Dalits and activists in the Bhima Koregaon case
  • Dhawan calls his dismissal "nonsense"
43 killed in a fire at units in illegal building in heart of Delhi
oppn parties
Shake Up in Ecommerce Marketplaces & Startups

By Sunil Garodia
First publised on 2016-08-21 20:52:58

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The ecommerce and startup space is readying itself for another round of acquisitions, amalgamations and mergers. As too many players have entered the market with the same faulty deep-discount-backed-by-heavy-advertising model, they are all chasing the same set of buyers with almost the same products. Not all of them have deep pockets and investors are not willing to fund their misadventures any more. Hence, the smallest ones or the weakest ones have closed operations while those who think they can find buyers at a decent price are looking for suitors. With the going getting tough, the tough are not getting going but the weak are capitulating. The consolidation that is taking place augurs well for the long term health of the sector.

Snapdeal is alleged to be looking for open arms from either Flipkart or Amazon. Earlier, it had closed down exclusively.com, a premier fashion and lifestyle marketplace it had acquired just 18 months ago, as a standalone platform by integrating it with itself. Shopclues is wishing to merge with Alibaba. Voonik has acquired three small startups this year. Ola has dumped the Taxi for Sure (TFS) platform after acquiring and putting it up on its app. The integration has been completed by shrewdly launching the economic Ola Micro and obviating the need of a separate TFS economy model. This will result in 700 employees being laid off. Askmebazar.com has temporarily suspended operations, but it is a clear indication that the platform is going down under as investor interest is zero and funds are not available. The problems of GoJavas, at one time the in-house logisitics partner of Jabong are well documented. It was spun off by Jabong as an independent logistics firm after which Snapdeal got into it. But with both Jabong and Snapdeal having stopped using GoJavas, the company first suspended operations and has not got a new investor in Pigeon Express (P) Ltd, a logistics service provider. Maybe the synergy with Pigeon’s current operations might rescue GoJavas but ecommerce logistics providers have certain bad habits (excess employees and other overheads) which Pigeon will have to take care of.

These are troubled times for both startups and established ecommerce players. Investors are increasingly looking for a solid revenue model and exciting new use of technology just for the sake of it is not getting the thumbs up. Timeframe for turning profitable is being demanded. It is good this is happening now as it will mean that henceforth only responsible managements will get funded and those trying the hit and miss formula will be refused politely. This will also mean that startups will spend more time with accountants than they have been doing till now. The time of falsely creating excitement around a business model by obfuscating its breakeven roadmap is now gone. Responsible budgeting, breakeven, profitability, prudent hiring, strategic and optimally priced acquisitions and smart and cost effective advertising are terms startups will have to familiarize with and use to keep a tight control on operation costs and show a healthy balance sheet to investors.