“Investors gathered at a Mumbai event agree that ShopClues is worth its value in a sea of startups that are overvalued. It’s an example how and what to do right”, began Mr. Batra.
Here are some of the key insights from the cofounder one of India’s least expected unicorns.
India is its own creature, it cannot be compared to China’s or any other ecommerce Industry“During 2011-2013 a huge hype and circular feedback built around how ecommerce startups are about to go boom in India. We have more time, regardless of the former hype saying this is the ultimate time the winners and the losers, who will be the ecommerce leader is decided.”
“The Chinese ecommerce industry is now 720 billion dollars. India’s is still at 36 billion dollars. You can’t expect India to follow the growth path of any other economy, India has its own dynamics. India will take longer than the Chinese ecommerce market took. The Chinese started their economic revolution in the 50s we started developing about 30 years later. So I feel there currently is an expectations mismatch.”
Trends in the next 12-18 months
Speaking of the coming trends in the next 12-18 months, Sanjay began by explaining why startups always say they will turn profitable in 18 months, but obviously never turned profitable in 18 months. “As an investor you don’t want to hear that profitability will come within the next 35 or 64 months.” So entrepreneurs feel they must give the famed 18 months answer. “Else you may not get funds.” He continued, “Businesses are complex. You can’t peg it to a GMV, LTP etc. It’s true they are fundamentals of measuring any business but these cannot be the deciding factors. You cannot predict when exactly a company will turn profitable no matter how much we try to peg it to financials.”
“It’s a fact that a few online players will end up capturing the market. It’s a fallacy to think several hundred ecommerce players can thrive in the market. The writing’s on the wall.”
“Vertical players will remain because horizontal players cannot do it all. It’s important to be flexible enough to change directions but there is also a risk of trying to do too much.”
When asked about his opinion on heavy burn rates among certain startups he said, “Capital can be more efficiently used but tapping a market is capital-intensive. Some ecommerce players have wasted 3.2 billion dollars, 3 billion dollars and 1.9 billion dollars, respectively in order to capture that 36 billion market. We need 25 billion dollars or so in coming years to capture this market. While the inefficient spending can be cut you still need a lot of capital.”
Predictions for the next 3 years“There are 3 Indias. Dedicate yourself to one of these markets.” Drawing inspiration from a source, Sanjay expects the industry will see 3 Indias:
1. 150 million consumers mainly from metro areas with more affluence. This segment is in line with those of developed nations. The likes of Amazon and Flipkart cater to these consumers.
2. 400 million customers similar to those from developing nations like Bangladesh. ShopClues focuses on this market.
3. The next 600 million customers are comparable to those in under developed nations.
“One model will not fit all three markets. You must decide which India to cater and stay true to that.”
Some of the ecommerce companies most admired“There are many but to name a few I admire Flipkart for its innovation on cash on delivery; Snapdeal for its agility in pivoting; Amazon for being pioneer in ecommerce and most of all eBay for the dramatic change it has made in the lives of millions of small scale merchants. It has truly made a large social impact.”
Final words of wisdom“While meeting the right people at the right time is necessary to succeed, entrepreneurs don’t fail - enterprises might. So don’t be fazed by the failure of your enterprise.”
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
