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India E-Commerce Sector Should be Renamed as Smartphone Commerce

Indian e-commerce companies including Amazon fighting with each others to be number one e-commerce companies to take in growing Internet users. As a business strategy they follow Indian Telecom sector rule of follow each others in all areas of business. As festival season started and these companies came out with their mega sale.

Claims and counter claims are flowing here and there just like political environment of India.
Flipkart claimed that they achieved single day $200 MN sale. Amazon came out and announced that they received 15 million orders whereas Sandeal claimed 11 million.

It is very encouraging that Indian buyers are showing their trust on growing e-commerce companies.
I would like to highlight few pointers which forced me to think otherwise.

1. Half of the sales are coming from Smartphone market and hence the opportunity to use the platform by other sectors are limited.

2. Electronics segment generate maximum revenue because of heavy discount offered by these layers.

3. The total revenue generated by these players are miniscule compared to total market size..

4. Based on the tentative revenue figure which is reported in print media, it is clear that the ARPU from each buyer is very low.

5. When Electronics and part of the fashion segment is generating maximum revenue then the platform name should be renamed as Smartphone -Commerce.

6. What will happen to these companies when there will be stagnation in Smartphone market by the end of Q2,FY 18, as their revenue will fall down dramatically?

7. It is not important that what is the total revenue but the profitability. I might be wrong but in my point of view, most of the e-commerce companies are making losses.

8. Most of the companies completely missed to generate alternative revenue stream. Amazon moved cleverly with its subscription service which will give them additional $.

 In my opinion, e-commerce companies operating in India way behind the curve in Product innovations to full the unfilled gaps to ensure alternative revenue stream but relying on auto mode Smartphone sale.

Major crisis is on the way for them if they decide to follow the same strategic and tactical business moves

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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