The Indian electric trader only burns the money department to make the profit, the venture capital firm is badly broken

In recent years, India's E-commerce thriving, the momentum of rapid development. However, most of the electricity dealers are losing money, why? Because these electric dealers are taking advantage of the opportunity to continue to invest money, to do their utmost to the strength of the enclosure, expansion of business scale. The electric dealer blindly burns the money not to be profitable, this can be anxious to break the venture capitalist, they put in the electricity merchant there the huge amount of silver, but has not been able to return, therefore has tightened the new investment, and to the electricity merchant pressure, asks them to shift the strategic center of gravity from the expansion to The big electric power companies have no way, had to brake on the fast expansion of the road, turn to seek profit. But as long as the electricity dealers stop their massive expansion and burn their money, their profits are on the line, and many are expected to make big profits within two years.

Rain fruit nets from the Indian media, "Economic Times" December 25 reported that India's well-known e-commerce retailers such as Snapdeal, clothing Shopping Network Myntra and so on are expected to achieve profitability in the next two years. This is a major shift for India's e-commerce industry, which has long been committed to expansion, regardless of cost. The pressure of venture capitalists, and the white-hot competition of multifaceted, promote e-commerce retail websites to seek new ways to cut expenditure.

Snapdeal is a large market-Mart website, with sales expected to reach 62.2 billion rupees in the next fiscal year, and will be profitable in the next year after the fiscal year. Kunal Bahl, co-founder of the Snapdeal website, said: "We are committed to becoming India's first profitable E-commerce company, as well as the largest mobile E-commerce platform in India." "Smartphones will be a huge driving force in mobile commerce," he said. Over the next 24 months, three-fourths of our orders will come from mobile phones. ”

Clothing sales website Myntra is headquartered in Bangalore. Myntra is planning to make a profit by the end of 2014. Mukesh Bansal, founder of the website, said: "Our site has a huge turnover, and now it's time to consider profitability." No scale benefit is meaningless. "When asked about the potential profits of the site. "In fiscal year 2014, the site will achieve 8 billion of the turnover," he said. The site no longer sells the clothes that are easy to wear and low in value, which will have an interest in boosting sales, but margins will be reduced. E-commerce companies can not suddenly achieve take-off. Between sales and sustainable development, we choose the latter. ”

According to the Indian Network company Affairs Department, in the 2013 fiscal year, the clothing sales website Myntra Sales amounted to 2.124 billion rupees, but the loss reached 1.347 billion rupees.

Experts believe that e-commerce companies are now rushing to achieve profitability, mainly because of the pressure of venture capitalists. "Most investors are only willing to invest in projects that are reliable and profitable," said Ashish Jhalani, an e-commerce expert. They are no longer willing to listen to your description of your business plans and strategies if these things do not have predictable profitability. ”

Since 2011, equity investors have invested 1.2 billion of dollars in online retailing. However, few new investments have been invested this year. This year, most of the $600 million trillion in E-commerce has been allocated to Flipkart, the flagship company in the electric business sector. The head of the big shopping site, Flipkart, is headquartered in Bangalore, and the company's chief has vowed to focus on expanding the size of the business, not profits.

Flipkart is a wholesale shopping site, losing 2.817 billion rupees in the 2013 fiscal year before taxes and special projects. The loss in 2012 was 1.09 billion rupees. However, the company's head said: "The site's business every year at a speed of 100% rapid development." Unless this growth rate slows, we will not consider the issue of profitability now. ”

As of March this year, Flipkart's total revenue was 11.8 billion rupees, compared with just 2.048 billion rupees a year ago. Revenue for 2015 is expected to reach $1 billion trillion, or 62 billion rupees.

Accel partner Venture Capital has invested in a number of electronic sites, such as Flipkart, Myntra, Bluestone and Zansaar, and the company's partner Prashanth Prakash said: " There is no investor who thinks it is time to curb expansion and make a profit first. But the money to make ends meet is not endless. Prior to this, many people thought that the electric company in 6-7 years can achieve the balance of payments, but now many investors are ready to make a reasonable extension of this period. ”

Now look at the situation of the international electricity dealers. The famous electric dealer dominate Amazon was founded in 1994, but has not yet achieved profitability. And Alibaba, the world's largest market-maker, is running on the road of profitability. Alibaba in the day cat and Taobao do not sell any of its own goods, so that it can easily battle.

A year or two ago, everyone was imagining who would be the leader in India's e-commerce sector, and now the leader's figure is slowly clear, and no one is questioning the viability of E-commerce. Leading electric dealers like Flipkart, still have the strength to wait for profit to continue regardless of the scale of expansion, but other electric operators are rushing to seek a breakthrough to erase the balance sheet of red ink (PS: to achieve profitability). For example, market power trader ShopClues began to choose cheaper digital promotion ads, and abandoned the more expensive traditional ads. In addition, it also encourages consumers to use bank card settlement, as far as possible not to choose cash Settlement mode of delivery, because the way the delivery of goods to the site to bear higher costs, and the bank card settlement rate is relatively high.

"If we have enough money and time, we will certainly prioritize the expansion of our business and not be in a hurry to make a profit," said the CEO of the ShopClues website. The company's sales in fiscal year 2015 are expected to reach 10 billion rupees and are expected to make a profit from January to March of the year. I think profitability is an important step in getting a round of investment. ”

The ShopClues website increases turnover by increasing the number of merchant and product categories in the site, and is also committed to the expansion of the mobile electricity market. In addition, ShopClues will develop a proprietary payment platform, which can be used not only for personal use but also for other e-commerce companies.

Another shopping site, Snapdeal, will reach 5 billion rupees in 2013 and expect to reach 30 billion rupees in 2014, with a growth rate of 500% per cent!

Hugo Net learned that the Indian electric business is expanding without making a profit and the history of the international electric business giant Amazon. In most people's view, Amazon will eventually make a profit when Amazon builds an oligopoly in the electricity business and starts to raise prices. Yukin Wei, a former Amazon executive, believes Amazon has a profitable business model, leading to the current loss due to massive investment. Amazon wants to make money and stop investing to get it done immediately. Amazon's retail business is making money, Yukin Wei says, but the overall business is a loss. The reason is that Amazon is currently increasing investment to find opportunities to expand and increase sales globally. Amazon is a profitable business and the company knows how to make money. Now, Amazon is making more expensive investments, trying to create businesses that can make more money.