India’s e-commerce story has soured. There has been a spate of bad news about India’s online companies in recent weeks, from valuation markdowns to job cuts and scaling back of operations to huge losses. There seems to be no relief for a sector that had become the darling of the Indian business world, attracting billion of rupees of funding last year.
With India’s large, young population, a growing middle class and the rapid growth of smartphone and internet use in the country, investors were piling in to grab a share of the market. But suddenly there has been a dramatic shift in sentiment.
“Definitely there is some correction happening for many of the e-commerce players’ valuations,” says Apoorv Ranjan Sharma, the co-founder and president of Venture Catalysts, a seed investor and innovation platform in Mumbai. “There are adjustments because of the presumptions on which these businesses were built. Companies are struggling to justify their valuation primarily because of issues related to their business models. These corrections are because they need more capital to sustain themselves.”
The market is fiercely competitive. A Morgan Stanley mutual fund a week ago cut the valuation of Flipkart, which is considered to be India’s answer to Amazon, by 15.5 per cent, bringing the company’s valuation to below US$10 billion.
Bangalore's Flipkart has held a series of funding talks with investors over the past few months, but they have declined to put up any cash, according to the Indian business newspaper Mint. It also reported that Snapdeal, another major Indianonline marketplace, had faced similar challenges raising funding.
Flipkart has also come under fire amid a row with the Indian Institute of Management (IIM) Ahmedabad. The company had been planning to take on new recruits from IIM branches across the country this month, but citing organisational restructuring it has deferred their start dates until December. IIM Ahmedabad wrote to Flipkart complaining about this move.
Meanwhile, the restaurant website Zomato has also suffered a valuation markdown and last month posted a loss of more than 4.9 billion rupees (Dh270 million) for the year to the end of March.
“The investment climate is different,” says Karma Bhutia, the founder of Ishippo.com, an e-commerce marketplace for handcrafted goods. “The biggest change is perception. People are asking some hard questions.”
He says that e-commerce sites have been spending vast sums of cash on customer acquisition by offering generous discounts on products, for example, which has mainly been “bankrolled by venture capitalists’ money”.
“The levels of funds has been tightening. Now they are at the stage where they have had to get into a phase of self-preservation. If they continue at that burn rate, trying to subsidise the customer acquisition with huge discounts and huge cashback, then they will fail,” says Mr Bhutia.
“This is a loss-leading concept where the guys making the maximum loss procure the customer because the products are the same. They have the same mobile phone, so the differentiator is the price. That model is unsustainable, and that’s where it’s taking a turn in terms of the e-commerce landscape. The market has become more conservative in terms of capital. These are the kind of challenges that have come in, so companies are having to pull up their straps.”
This is not to say that the future is not bright for the sector, however.
“In the e-commerce space there’s still a big gap to be filled in the market. A country like India is totally underserved,” Mr Bhutia says.
Projections suggest enormous growth potential in India’s e-commerce market, which is expected to reach $119bn by 2020, according to Morgan Stanley. It forecasts that India will have close to 320 million online shoppers in 2020, up from 50 million last year.
The number of internet users is estimated to have reached 402 million at the end of last year, meaning India has surpassed the United States to have the second-largest number of internet users in the world, with only China in front, according to the Internet and Mobile Association of India and IMRB International.
At the same time, a large portion of Indians do not have bank accounts, and even among those that do have debit and credit cards there is a reluctance to pay online, which is why cash on delivery has become a widespread option in the country for internet shopping.
“The bad news has been coming up this year,” says Mohd Wasi, the founder of Fagnum, an online start-up. “This will go on for some time and we’ll see how the companies evolve.”
He says companies will have to work on new strategies to sustain their business.
Raising funds is tough in the current environment for e-commerce and other online start-ups.
“Investors are not giving money because they want to see the profitability of start-ups in mind,” Mr Wasi says. “Nobody is giving money on an idea stage right now.”
He says the sentiment is that this year will continue to be a challenging time for raising funds.
But Mr Sharma explains that the situation is a phase that the sector needs to go through as it matures.
“It will lead to a new breed of e-commerce companies,” he says. “The model will be more robust in terms of economics and profitability.”
He says that some companies will inevitably go out of business, while there are also likely to be some takeovers and consolidation.
“This is a sign of maturity coming into the market. Earlier it was the phase when all these start-ups were raising multiple rounds and investors were putting money on the hopes that this was a very large market. It was required.”
He notes that India’s e-commerce “is still a very large market that has yet to be tapped”.
The shift in India’s e-commerce sector comes after the India’s government announced at the end of March its official position on foreign investment into the rapidly growing industry. Its rules stated that overseas investors could take stakes of up to 100 per cent in e-commerce marketplace companies in India.
But the government also outlined that under the new rules e-commerce companies would not be able to add their own discounts to products, which has been a key strategy for these websites.
“E-commerce entities providing a marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field,” it said.
There is a significant amount of competition in the market, which adds to the pressure, particularly given the presence of international firms such as Amazon that have strong financial backing and tried-and-tested business models, Mr Sharma says.
There are no signs of competition abating soon. Tata Group, one of India’s biggest and oldest conglomerates, has just entered the e-commerce space, investing hundreds of millions of dollars to launch its TataCLiQ.com website, selling products including clothes and electronics. It offers customers the option of ordering online and having the item delivered or being able to pick up the item from a partner store.
Tata says it believes it could “be a massive game changer in the e-commerce sector … reducing logistics and delivery costs for viable unit economics and a long term sustainable profitable business”.
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SCHEDULE
Thursday, December 6
08.00-15.00 Technical scrutineering
15.00-17.00 Extra free practice
Friday, December 7
09.10-09.30 F4 free practice
09.40-10.00 F4 time trials
10.15-11.15 F1 free practice
14.00 F4 race 1
15.30 BRM F1 qualifying
Saturday, December 8
09.10-09.30 F4 free practice
09.40-10.00 F4 time trials
10.15-11.15 F1 free practice
14.00 F4 race 2
15.30 Grand Prix of Abu Dhabi
UAE currency: the story behind the money in your pockets
Brief scores:
QPR 0
Watford 1
Capoue 45' 1
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
Sholto Byrnes on Myanmar politics
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
UAE currency: the story behind the money in your pockets
pakistan Test squad
Azhar Ali (capt), Shan Masood, Abid Ali, Imam-ul-Haq, Asad Shafiq, Babar Azam, Fawad Alam, Haris Sohail, Imran Khan, Kashif Bhatti, Mohammad Rizwan (wk), Naseem Shah, Shaheen Shah Afridi, Mohammad Abbas, Yasir Shah, Usman Shinwari
'Saand Ki Aankh'
Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars
The years Ramadan fell in May
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
Dengue%20fever%20symptoms
%3Cp%3EHigh%20fever%20(40%C2%B0C%2F104%C2%B0F)%3Cbr%3ESevere%20headache%3Cbr%3EPain%20behind%20the%20eyes%3Cbr%3EMuscle%20and%20joint%20pains%3Cbr%3ENausea%3Cbr%3EVomiting%3Cbr%3ESwollen%20glands%3Cbr%3ERash%26nbsp%3B%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Dubai Rugby Sevens
November 30-December 2, at The Sevens, Dubai
Gulf Under 19
Pool A – Abu Dhabi Harlequins, Jumeirah College Tigers, Dubai English Speaking School 1, Gems World Academy
Pool B – British School Al Khubairat, Bahrain Colts, Jumeirah College Lions, Dubai English Speaking School 2
Pool C - Dubai College A, Dubai Sharks, Jumeirah English Speaking School, Al Yasmina
Pool D – Dubai Exiles, Dubai Hurricanes, Al Ain Amblers, Deira International School
EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5
Killing of Qassem Suleimani
Results
3pm: Maiden Dh165,000 (Dirt) 1,400m, Winner: Lancienegaboulevard, Adrie de Vries (jockey), Fawzi Nass (trainer).
3.35pm: Maiden Dh165,000 (Turf) 1,600m, Winner: Al Mukhtar Star, Adrie de Vries, Fawzi Nass.
4.10pm: Handicap Dh165,000 (D) 2,000m, Winner: Gundogdu, Xavier Ziani, Salem bin Ghadayer.
4.45pm: Handicap Dh185,000 (T) 1,200m, Winner: Speedy Move, Sean Kirrane, Satish Seemar.
5.20pm: Handicap Dh185,000 (D) 1,600m, Winner: Moqarrar, Dane O’Neill, Erwan Charpy.
5.55pm: Handicap Dh175,000 (T) 1,800m, Winner: Dolman, Richard Mullen, Satish Seemar.
Company%20profile%20
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The specs
The specs: 2019 Audi Q8
Price, base: Dh315,000
Engine: 3.0-litre turbocharged V6
Gearbox: Eight-speed automatic
Power: 340hp @ 3,500rpm
Torque: 500Nm @ 2,250rpm
Fuel economy, combined: 6.7L / 100km
MATCH SCHEDULE
Uefa Champions League semi-final, first leg
Tuesday, April 24 (10.45pm)
Liverpool v Roma
Wednesday, April 25
Bayern Munich v Real Madrid (10.45pm)
Europa League semi-final, first leg
Thursday, April 26
Arsenal v Atletico Madrid (11.05pm)
Marseille v Salzburg (11.05pm)
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
FORSPOKEN
%3Cp%3EDeveloper%3A%20Luminous%20Productions%0D%3Cbr%3EPublisher%3A%20Square%20Enix%0D%3Cbr%3EConsole%3A%20PC%2C%20PS5%0D%3Cbr%3ERelease%20date%3A%20January%3C%2Fp%3E%0A
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Star%20Wars%20Jedi%3A%20Survivor
%3Cp%3EDeveloper%3A%20Respawn%20Entertainment%0D%3Cbr%3EPublisher%3A%20Electronic%20Arts%0D%3Cbr%3EConsole%3A%20PC%2C%20PS5%2C%20XSX%0D%3Cbr%3ERelease%20date%3A%20March%3C%2Fp%3E%0A
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Final%20Fantasy%20XVI
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Street%20Fighter%206
%3Cp%3EDeveloper%3A%20Capcom%0D%3Cbr%3EPublisher%3A%20Capcom%0D%3Cbr%3EConsole%3A%20PS5%2C%20XSX%2C%20PC%0D%3Cbr%3ERelease%20date%3A%20June%3C%2Fp%3E%0A
Diablo%20IV
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The%20Legend%20of%20Zelda%3A%20Tears%20of%20The%20Kingdom
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Marvel's%20Spider-Man%202
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Assassin's%20Creed%20Mirage
%3Cp%3EDeveloper%3A%20Ubisoft%0D%3Cbr%3EPublisher%3A%20Ubisoft%0D%3Cbr%3EConsole%3A%20PC%2C%20PS5%2C%20XSX%2C%20Amazon%20Luna%0D%3Cbr%3ERelease%20date%3A%202023%3C%2Fp%3E%0A
Starfield
%3Cp%3EDeveloper%3A%20Bethesda%20Game%20Studios%0D%3Cbr%3EPublisher%3A%20Bethesda%20Softworks%0D%3Cbr%3EConsole%3A%20PC%2C%20Xbox%0D%3Cbr%3ERelease%20date%3A%202023%3C%2Fp%3E%0A
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
The specs
Engine: 5.2-litre V10
Power: 640hp at 8,000rpm
Torque: 565Nm at 6,500rpm
Transmission: 7-speed dual-clutch auto
Price: From Dh1 million
On sale: Q3 or Q4 2022
The biog
Favourite films: Casablanca and Lawrence of Arabia
Favourite books: Start with Why by Simon Sinek and Good to be Great by Jim Collins
Favourite dish: Grilled fish
Inspiration: Sheikh Zayed's visionary leadership taught me to embrace new challenges.
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
The biog
Hobby: Playing piano and drawing patterns
Best book: Awaken the Giant Within by Tony Robbins
Food of choice: Sushi
Favourite colour: Orange
THE BIO:
Sabri Razouk, 74
Athlete and fitness trainer
Married, father of six
Favourite exercise: Bench press
Must-eat weekly meal: Steak with beans, carrots, broccoli, crust and corn
Power drink: A glass of yoghurt
Role model: Any good man
