Wednesday 20 April 2016

Etailers’ business targets – Tall claims but far from it
Every now and then, ecommerce leaders and online start-ups announce their ambitious plans. We get an impression that etailers have it all figured out, whether it’s sales figures, GMV, profits, buyer & seller base, profitability, or break-even point.
Although, when we talk about results, players such as Flipkart, Myntra, Paytm, Jabong, Snapdeal, and eBay haven’t quite succeeded in meeting their grand goals.

The GMV dream

Gross Merchandise Value (GMV) was featured in every online player’s list. But none of them managed to achieve it.
  • Myntra’s target – $ 1 billion GMV by March 2016. Achieved – $800 million by January 2016
  • Flipkart’s target – $10 billion GMV by March 2016. Achieved – $5 billion by December 2015
  • Paytm’s target – $3-4 billion GMV by March 2016. Achieved – $3 billion by February 2016
  • Snapdeal’s target – $10 billion GMV by March 2016. Official current GMV figure is not out but reports suggest that the etailer didn’t reach its target

Scaling down from high valuations

In September 2015, Flipkart had confirmed its valuation at $15.2 billion (Rs 98,800 crore). However, in a span of 5 months, the company’s valuation dropped by almost 27% to $11 billion.
This devaluation marked the beginning of realistic estimates instead of inflated hollow figures. The start-up markdown trend continued and several investors cut all ties with ecommerce biggies such as Snapdeal, and eBay.

Breaking Even

Alibaba-backed Paytm’s target is to achieve profitability by 2017 and break-even sooner than its rivals. But the company incurred huge loss of Rs. 372 crore. Now that Alibaba is ready to fly solo as an independent online marketplace, will Paytm meet its 2017 deadline?
Fashion etailer Jabong was also looking to break-even soon. But within two months, news came out that the etailer is now hunting for buyers with no takers.
With so many incomplete targets, will ecommerce companies become more practical while announcing their business dreams? Or will they continue to sell huge figures with a future date attached and fail yet again?

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