From Startups to Shutdowns

The launch of #DigitalIndia Summit has raised hopes among the Indian start up community. The start up figures of India are amazing. I think it has something to do with the confidence and ability to withstand tough business times in young India-thanks to the population.

Indian kids grow in a very competitive environment right from the kindergarten days and thus, they realize quickly that genuine hard work and perseverance are very essential for a bright future in any field and also for becoming a successful entrepreneur.

I have been closely observing the Indian start up environment and feel that a lot has changed in modern times. Earlier, due to paucity of funds, one had to think twice before jumping into entrepreneurship. Today, a lot of money is flooding the market and funding for a start up/project is not at all difficult. Moreover, CXOs too have realized a better way of investing money – in a start up!

Many start up meets are being frequently organised all over the country providing ample opportunities to youth to think and plan big through entrepreneurship. Such events are limited not only to metropolitan cities but are being held regularly in Tier 1 and  Tier 2 cities as well. The youngsters are now bold enough and willing to take calculated risks to invest in a start up.

I also read a lot about NRIs returning to India and setting up businesses. They bring in money along with useful contacts and provide employment/opportunities to deserving professionals.

So, what is the problem? What’s wrong with start ups mushrooming in India? Will they really succeed? Well, just wait and watch.  The answer is yet to come.

 

Thin line in eCommerce

Last three years have witnessed a major shift in gears in the Indian eCommerce industry. Indians who used to visits shops to buy clothes, furniture and groceries now have an option to buy all these items with a single click.

With 17% Indian population using internet, eCommerce companies have got the opportunity to cater a large audience. Due to a neck-to-neck competition, these companies keep coming with exclusive offers to bring more people on board. eCom companies have to come out with offers, deals and partnerships to be visible in this think cloud of eCom companies. Some have been following a pattern, they choose a date, do a big bang marketing campaign around it and most important, offer crazy discounts.

We have seen in the past that selective date sale have attracted a lot of shoppers. Brands like Google, flipkart have even faced overflow of traffic causing websites to go down. Flipkart had to send across a formal apology letter to everyone who were not able to checkout that day (I was one of the recipient).

Now, coming to the point, the hidden line in these big bang discounts is the actual profit these companies make and the elevated delivery time of products booked in such offers.

Hidden Lines:

Return to Sender - eCommerceWhat is an actual sale number? On the day of the sale, some eCom companies aiming to make sales up to Rs 1,500 crore in 2015. These numbers are achievable, specially looking at the internet users of India. The catch is how much profit do these companies make in real. Most of the eCom companies follow ‘no question asked’ return policy. It has been told that these companies suffer a large amount of product returns post sale. Therefore, the sale number may be 10million, but post returns, the number may come down to 5million. The cost of delivering and then picking up the returned item is not even taken into account.

returns-delivery-eComThe puffed up delivery: Products ordered during sale come with a fine print- ‘due to heavy delivery traffic the product will be delivered in 14-21 days.‘ Not many uses have patience to wait for two to three week for an item to get delivered. Therefore, whenever you come across such flash sales make sure you keep account of the delivery time.

I will be adding some stats to the mentioned numbers in coming days.

Let me your thoughts on the hidden lines of eCom.