Ecommerce: The New Gold Rush

Ecommerce: The New Gold Rush

Ecommerce is suddenly the in-thing and everyone wants to be a part of it, one way or the other.  While the established players are talking about growing at more than 100% year on year for the next couple of years, very surprisingly people still in their planning stage are talking about reaching 10% of their total revenue through ecommerce in the first year of operations. In the ecommerce industry as a whole, Sales are increasing rapidly; new players are mushrooming daily and funding companies are pouring money as if there is no other industry with potential!

Let us have a look at some of the recent investments by Global Venture Funds in Indian ecommerce ventures

Online Apparel retailers – Myntra.com, Zovi.com, Exclusively.In, Yebhi.com (primarily shoes)

Deals and Group discounting – Snapdeal, Deals and you, Fashion & You.

Books to Electronics: Flipkart, Indiaplaza, Letsbuy, BuyThePrice

Baby and Maternity wear: Babyoye.com, Firstcry.com

Closed group exclusive discounting: Fashion & You. 99labels

Some Acquisitions: Chaupaati Bazaar by Future Group, SoSasta by Groupon, PicSquare by Infibeam

Newspapers, blogs and other media forms are talking endlessly about ecommerce being the next big thing. We have humungous numbers being spelt out daily, projecting the industry to grow @70% Y-o-Y to reach $ 10 Billion this financial year. The growth and revenue targets might really sound a tall order to the cynics, but let us compare the figures with some other regions of the world.

USA: $ 210 Billion (Amazon reached $32 Billion)

Western Europe: $120 Billion

Japan: No clear figure but clearly more than $ 100 Billion

China: $ 80 Billion (Taobao.com did $61 Billion and did $150 Million in a single promotional day)

Compared to these numbers, the $ 10 Billion suddenly looks very small. Especially considering that the size of internet users in India has crossed 100 Million, we are only talking about $100 per person in a year. This is less than the online payment it’d generate if it is assumed that half the internet users have broadband connection and they pay their monthly rental online. Or, everyone buys one electronic item a year. Or, only 10% buy their grocery online. Or, only 1% buy their grocery, apparel, tickets, electronics online. Now this number suddenly is dwarfed by the possibilities that the remaining 99% of the market presents.

So, it is very safe to assume that the next gold rush is in Indian Ecommerce market. The earlier you jump onto it, the better prospects you have of making a fortune!

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