The big players of e-commerce are only surviving in this field.
The e-commerce when hit the markets, from then till today e-commerce has maintained its place in the market and is famous, most people are attracted towards the e-commerce giants like Flipkart and Amazon. When Flipkart first hit the Indian market, it was nothing they came with the online selling of books concept but slowly they started selling all the goods on the website, same did the Amazon which is dominating the e-commerce abroad and in India as well. Digital marketing is the platform which has pushed the big giants to give their best as maximum consumers purchase the products through e-commerce which is really a big and good change.
The latest Flipkart-Snapdeal achievement saga is an example that how two big giants are merging, do you know what’s the reason behind? The reason behind is the Capital which big tycoons of this industry sometimes fail to assemble it.
According to the latest reports, Amazon is about to bid for BigBasket which is the biggest online grocery store of India, this all shows that how only big companies can survive who have huge fund backing.
Capital Matters a Lot
According to Mohan Kumar, who is the partner of North Venture Partners, “It’s more or less a game of those who can pour in more capital with most players offering consumers the same product If SoftBank pumped in a handsome amount into Snapdeal, they would be up and fine and running. Similarly, other large e-commerce players are all about those who have a bigger capital to keep running their operations smoothly as the sector is logistically heavy and requires a huge network of manpower, whether permanent or contractual.”
The latest mergers in the e-commerce industry were because of the capital expansion plan, as the margin is very low in this industry of the products and services which e-commerce sells, thus the companies with huge funding could only survive in this industry.
The biggest drawbacks of these giants are they have to give an attractive discount to consumers to attract to their sites, this involves the huge cost, without the prior backing of funds such things are impossible.
One Should Understand The Market Well
If we talk of the Flipkart, it still stands well like out of the box because they have controlled well and Flipkart operates most of the logistics in-house that’s the reason Flipkart is still at its marginal activity.
Kumar added, “With challenges like workforce management and low margins, it is difficult to make that kind of returns with the same old model. Most players have just jumped in the market without even understanding what the need for their company is and Yes the battle was heating up in the e-commerce space sometime back when it was fresh, but now it’s mostly about the two or three big players who possess the maximum capital amongst the crowd.”
You might see that e-commerce giants and others are growing but there are certain leaps and bounds in this industry. If we look at the loan of Snapdeal, Amazon, and Flipkart, the combination was like INR 11,754 crore, huge amount huh? Yes, it is that’s why only the companies with a huge backing of funds could survive here.
