Source: VCCircle
The entire Indian e-commerce biz, excluding online travel, is at least 8-10 years away from the scale, where inventory-led model may turn profitable.
While more than $350 million have been invested in Indian e-commerce over the past three years, a majority of the capital has gone into only one kind of e-commerce business model, i.e., inventory-led e-commerce models. The inventory led e-commerce models have almost the same economic characteristics as the traditional brick-and-mortar model when it comes to inventory risk exposure, warehousing, and sourcing. Even at an approximately $65 billion in gross merchandise value (excluding Kindle, AWS and digital downloads) in 2011, Amazon did not produce more than 0.25 per cent in operating margin from Amazon.com. The entire Indian e-commerce (excluding online travel) is around $550 million and is, at least, 8-10 years away from the scale, where inventory-led model may even turn profitable.
