Update: Thank you all for your excellent questions. If you have more questions, please leave them in the comments section. I will answer them when I get free time.
In July this year, I ruffled many feathers when I said that Indian e-commerce companies, including Flipkart and Snapdeal, will never make profit. I know I made a bold statement, but I have my reasons to believe so.
Undoubtedly, no e-commerce firms in India will make a profit. You are hoping to be the last man standing. You can never be the last man standing since there is always a person with more money than you. And 50 per cent of all customers that shop online do it for discounts and delivery. So, it’s a hard game to win. One thing you don’t want to do is fight with a global giant who will do whatever it takes to take your market.
The likes of Flipkart and Snapdeal need to understand that they are a retail company, not a technology firm. Customers visit their shopping sites not because they have got wonderful features such as Artificial Intelligence. For a retail company, the key is merchandising — selection, pricing and availability. You can have three or four areas where your selection is unique, which becomes the reason customers come to you. Whether that would be enough for us to succeed, it is hard to answer. It is tough to beat Amazon in technology. Some battles you don’t fight.