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#3 Trends That Emerge When A Sector Begins To Limp

#3 Trends That Emerge When A Sector Begins To Limp
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As India is looking at a slump in valuations of biggest e-commerce giants such as Flipkart & Snapdeal, an overhaul in the sector is obvious. Over the past few years, the E-commerce sector has had seen its bit of acquisitions, mergers, and shutdowns. Now, various e-commerce players are making major changes in their operation. Few of them are shutting down in-house operations to cut costs while others are doing it to fight the problem of the funding crunch.

Given below are 3 emerging trends in the E-commerce sector which is witnessing some major revisions.

Startups Inching Towards Consolidation:

E-commerce is one overcrowded sector with slightly different products and that is why this sector is facing some major revamp in last few years. One of the most noticeable trends of this sector is the acquisitions and mergers of startups to grow in each and every term.

The leading online E-commerce marketplace Flipkart is consolidating the operations of its in-house supply chain and logistic arm Ekart, integrated in 2015. The company is in talk with various third party clients and plans to generate revenues from other clients to recover losses.   

Recently, Ekart also suffered INR 810 crore loss in the nine months to March 2016. The losses came in addition to INR 2850 crore loss by Flipkart India and Flipkart Internet in FY2016. Ekart already offers warehouse solutions to rivals Paytm and Shopclues along with offline players like Madura Garments and Apollo Hospitals. The company will continue giving warehouse solutions to e-commerce players to generate revenue to recover losses.

Waving Off of Non-Core Assets:

Another E-commerce giant Snapdeal will shut the operations on Feb10 for Shopo, an online marketplace to sell designer handicraft products. Shopo was acquired in May 2013 with an aim to allow small and individual handicrafts seller across India to sell online. In its blog, the company said that it is beneficial for them to pause their journey and plan ahead for greater success.  

The reason for ending the Shopo journey is primarily to raise funds and cut costs. The company had also shut down its premium and luxury fashion goods platform Exclusively.com last year to save fundings.

Newer Players Encashing the Opportunity:

Indians are becoming more and more comfortable with online purchases with various platforms offering them the best shopping experiences. And to tap the rapidly increasing e-commerce sector, major players are launching their own online shopping platform.

Telecom Operator Idea Cellular may also soon launch its own e-commerce platform to sell smartphones and mobile services. The move came at a time when online shopping in the country is outpacing growth in retail division. The web portal will allow customers to primarily buy mobile devices, mobile services and smartphones. However, the company will not explore other sectors of e-commerce. Idea, owned by the Aditya Birla Group has already entered the fashion segment earlier with its online portal Abof.com.


Edition: July 2017

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