This is a great moment in the history of Indian e-commerce industry. I call it an important and a critical milestone, as we are going to witness a transformation in this segment, if not a revolution. Of course, not to mention separately that this is going to have its own cascading effect. Right time for those who are on the border to jump and take a firm step, put ideas into action, make this action into serious actions, leading serious actions into results, take those results to progress, from progress to growth, lead growth to excellence, excellence to learning and finally learning to consolidation. This is how a typical industry works and it takes anything between a decade to 4 decades from industry to industry and market to market. I strongly recommend entrepreneurs who have good ideas and a great team in e-commerce space to go full throttle to go after bigger investments and aim at serious action. For investors, this is a good time to scout for interesting & innovative ideas to fund and establish yourself in this space. Needless to say that consumers get the best of all; but be choosy and not go with the wind (support only merit pls). And finally, the policy makers, who should regulate and work for the benefit of the ecosystem and not favour anyone in specific. Policy makers or the regulators have a key role in this revolution that's taking place right now in India. We are going to see deals left right and center from now on. In fact we have already started seeing it in the last few months with Flipkart buying Myntra for a mind blowing valuation. This is just the beginning. If I am not wrong, we are going to see M&As worth $100b in the next 3-4 years. This is still big big money in spite of the perceived value of the billion going down.
The reason why we need to think so much about this industry is that it should NOT become another bubble. A bubble doesn't necessarily be like the Y2K bubble, which got burst in a short span. Few are fast, few others are long. Its very important that we sustain this for a couple of decades so that it is benefiting the entire eco-system and not just few players. The typical nature of a short term bubble is a sudden growth and fall. I can name a few others like, IPTV, WiMax in telecom space, hybrid car, micro finance, e-learning, etc. Trust me none of them were wrong or had a short fall in technology. They were either not regulated properly or ahead of time. The entrepreneur is a simple fellow with limited funds, small team and a budding idea but with a BIG dream. The policy makers should not be biased in favouring bigger organisations, lest the entire eco system will collapse with misdeeds of these few.
Another classy example is the airlines industry. Why did Paramount, KFA go bust? Why is IA still struggling? I don't think other players like Indigo, GoAir, Spicejet are very far off. In the process of giving cheap tickets to consumers, they might have to taken wrong paths or steps, which is not in the benefit of the society or country at large. So was the case with telecom industry. Everybody is struggling except a couple of them. Many players closed shop too.
E-commerce is no different. Big money, big threats. Though it might appear very rosy from the outside, the inside story is different. Of course, its not rotten, but why should we wait till then. I know I might sound pessimistic, but I want to see a long and safe journey rather than a short and perceived to be a joyful one. I respect the Bansal brothers to have put up a great show in such a short span. This to me is no lesser than a miracle. What Bezos took more than a decade, these guys did it in 5 years. The policy makers or the Govt. should spend more time understanding the eco system to get a bigger view and create realistic plans and take steps to encourage small medium and large entrepreneurs as a whole. We have seen many entrants right from 2005 onward, but the industry started heating up from 2008 onward and the revenues have been growing at a constant pace.
Total retail sales in the US topped $4.53 trillion in 2013, and ecommerce accounted for a significant portion of that growth, up 16.9% in 2013—or nearly $40 billion. I don't deny that everything is going great there. This doesn't happen in the west. It happens in MEA, APAC, UK, Europe and the US too. We have seen great retail chains like Le Sanza, Blockbuster, etc. go bust (http://www.retailresearch.org/whosegonebust.php). The reasons could be many. But we know the top ones. This should not happen in India. At least, even after knowing what went wrong elsewhere.
The e-commerce industry should live a long life. I am sure that with newer generation becoming more techno savvy and online savvy, this will be a big revolution. Let this be a positive one that benefit everybody; and nation the most.
