Indian electric: Only 0.1% enterprises can get wind to invest high cost living

"This is a very low starting point for a very long investment cycle and a higher cost for customers in India," said Aloc Mittar, Canaan's partner in India. "The investment company in Menlo, Calif., has also been a venture capitalist in India," he said.

Tiger Global Fund and Accel, the two investment companies that have been involved in early Facebook investment, are betting against an outbreak in India's electricity market.

But they seem to need a lot of patience.

Indian consumers are not accustomed to using credit cards, expecting huge concessions from businesses, and few or even few online payments. The imperfect logistics system also means that online retailers have to bear the huge cost of their own logistics. According to Technopak Advisors Pvt, a New Delhi consultancy, India's electricity quotient accounts for only 0.1% of the total social retail sales, compared with 3.8% in China and 8% in the US.

However, Tiger Global Fund, Accel Partnership and other investment companies have seen the opportunity.

"This is an industry with a very low starting point and a very long investment cycle and a high cost to customers in India," said Aloc Mittal, Canaan's partner in India, Alok Mittal. "The investment company in Menlo, Calif., has also been a venture capitalist in India," he said. "In order to be successful, you have to hold a stake in your business and be able to endure years of loss," he said. "

Now, he says, there is not a single company in India that is making a profit, because the advertising spending and costs of getting customers are still at "very high" levels.

Investment for the next generation of consumers

The companies invested by Tiger Global Fund and Accel partnership include Flipkart and Myntra.com. The former is an online retail business that is almost all-encompassing from books to mobile phones, while the latter is a vertical distributor focused on the apparel sector. In the recent venture capital case, Zovi.com, a costume dealer, gained investment from SoftBank and tiger funds. Manish Chopra, Zovi's CEO, said they received a total of 10 million dollars of investment on February 1.

According to London's Euromonitor consultation, India's online retail market grew by about 44% in 2006-2011, while India's overall electricity market was expected to reach 114 billion rupees (about $2.1 billion trillion) by 2016.

"The Internet will foster a different generation of Indian consumers. "Samir Gandhi (Sameer Gandhi), the Accel partner, announced on August 23, 2012 that Accel invested 1 billion rupees in the bookmyshow.com of India.

The capital magic spell of electricity dealers

The Euromonitor consultancy report says online retail growth in India is growing much faster than physical retailing. Data show that last year, India's electricity sales growth rate of 13%.

According to Technopak estimates, Flipkart's revenue rose from $15 million in 2011 to $100 million in 2012, while another yebhi.com revenue from 10 million to $30 million. As of March 2012, department store operator shoppers stop company sales grew by 28% in the fiscal year, with a total of 27.9 billion rupees, according to data compiled by Bloomberg.

But even so, the Indian power companies appear to be so weak in front of international retail giants like Amazon. On the other hand, these international giants and they do not have much competition, because in accordance with India's request, wholly foreign-owned enterprises are prohibited to directly operate the electric business.

Amazon's business in India began last year, starting with junglee.com. The site has only a small number of proprietary products, mainly for consumers to provide third-party retailer links, consumers can look for their own goods in the third party retailer.

Last December, Anand Sharma, India's trade minister, told Congress that the Central Law enforcement Agency, which was responsible for the investigation of foreign investment irregularities, was investigating whether Flipkart violated India's regulatory regime for electric companies. And Flipkart declined to comment.

　　

"This is an industry with a very low starting point and a very long investment cycle, and a higher cost for customers in India," said Aloc Mittar,

Canaan Partner in India. "The investment company in Menlo, Calif., has also been a venture capitalist in India," he said.

Incomplete financial system waiting for return

ACCEL India Partner Prakash (Prashanth Prakash) says it will take 7-8 years to build a single category online retailer in India and in the US in five years. Prakash is now in Bangalore, mainly responsible for Accel India's electricity business investment. Since 2006, Accel has invested 250 million of dollars in India's electricity business.

"Working in India is quite challenging for people who work in investment. "I don't think anyone would disagree with that," Prakash said. He revealed that some of the companies that Accel invested in could turn a profit in the next 18 months.

According to a April 2012 World Bank report, only about 2% of adults in South Asia have credit cards, compared with 8% in China. In such an environment, Flipkart and its competitors support the payment of goods to consumers. The risk is that consumers can refuse to pay when goods arrive.

"It's easy for consumers to change their minds in midstream," Pinakiranjan Mishra, a partner at Wing Mishra, said. He said that the delivery of goods to the payment method is easy to make high rejection and high return rate of production.

A high cost of living

Pragya Singh, a Technopak consultancy, estimates that the retailer's claim to a new customer would cost as much as 1000 rubles, which would require the new customer to achieve 3 times or even 4 times times the amount of consumption to make the profit.

In India, most online retailers cannot hire tens of thousands of people to form a freight team to reduce reliance on that inefficient and reassuring social logistics, Euromonitor Consulting analyst Das Shabori das.

Prakash said that the second and third round of financing of the electric companies have been difficult to be followed by the successor, and now the industry is a wave of consolidation. Zovi.com The news this month that it is merging with the customer T-shirt designer inkfruit.com, Flipkart also acquired a digital distributor last February. Letsbuy.com, and HOMESHOP18 also acquired the Coinjoos.com bookstore in 2011.

"Now tonnage determines status, and only the greatest can survive." Zovi's Chopra said.

After winning Facebook

PrivCo, a financial information analyst at New York, said that since Facebook went public last year, Accel had reaped a lot of investment in the social-networking company. With 18 million of dollars invested in Facebook in 2005 and 2006, Accel nearly 6 billion dollars after selling shares.

PrivCo estimated that Tiger funds also earned about 1.2 billion dollars.

Sargent Carolyn Sargent, spokeswoman for Tiger Fund's investment in India, declined to comment.

Mr Mittal, of Canaan, says investors have little choice but to have an existing power provider in India.

In 2010, the online travel website Makemytrip became India's first and only company to sign up to Nasdaq after its 10 anniversary. So far, Makemytrip shares have risen about 14%, while Amazon has risen by about 5.7% per cent over the same period.

Yongan's Mishra analysis shows that there are no other companies listed because companies need to prove their profitability before entering the securities market.

"India is completely different from Silicon Valley. Prakash concluded.