Apr 19, 2015

ECOMMERCE PLAY IN INDIA 2015

ECOMMERCE PLAY IN INDIA 2015

The eCommerce sector has seen unprecedented growth in 2015. The growth was driven by rapid technology adoption led by the increasing use of devices such as smartphones and tablets, and access to the internet through broadband, 3G, etc, which led to an increased online consumer base. Furthermore, favoured demographics and a growing internet user base helped aid this growth. In terms of highlights, the growth shown by homegrown players such as Flipkart and Snapdeal and the huge investor interest around these companies displayed the immense potential of the market. Velocity of this sectors growth is which everybody is factoring in even though the GMVs are relatively tiny,

Fundamentals
In the past there were no fundamentals, but today there are fundamentals and is a futuristic investment at a very high price. Fundamentals of the ecosystem haven't changed, government regulations haven't changed yet and are likely to change in near future.

Valuations
If you meet Investors the valuations are HIGH. If you meet an entrepreneur the valuations are LOW. It is very hard to price as there is a lot of greed around it and also the offline to online retail players is 3X.

Issues

  • Organisation scaling
  • Tax and regulatory structuring
  • Risk, fraud and cyber security
  • Compliance framework
Future
  • 6 out of 10 consumers will move online
  • Offline & Online ecommerce players will converge
  • Payments more through wallets
  • Regularization of ecommerce will happen
  • $100 bn GMV


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