No matter how much lucrative has been the idea of launching an e-commerce start up, the basic objective of all such ventures lies in the market share one can achieve. Undoubtedly the logistics involved in actually starting a macro level e-commerce venture are huge and account for high preliminary as well as operational costs. Major giants like Flipkart, Myntra, Jabong are advertising aggressively through television, print and digital media alike, in the process chunking huge expenditure cash flows. While it does make sense for all such websites to allow for high marketing budgets, the results have been dismal when it comes to the profit and loss statements.
However, there is, without a doubt, a sincere admission of
the fact that conventional shopping has been replaced by online shopping in
most of the urban households thus implying a tremendous up-line growth in the
industry.
Conversely, even if these ventures have done enough to
ensure an oligopoly market condition in the e-commerce industry, there is
no guarantee that they will actually become profitable in next two years. After
all, till when these websites will be aided through seed funding. With little
bottom-line growth, the idea of going public also seems ominous. Thus we come
to an easy sought out conclusion that only cost cutting and cost minimization
can help cover the losses in such intense competition.
Business linking and partnerships are essential for growth
thereby taking the leverage of economies of scale. Delivery mechanism should be
among the best yet cheapest. Not more than a year ago, shopping on Flipkart
required minimum aggregate of Rs.200 in order to avail free home delivery lest
you pay Rs.30 extra. Now the minimum aggregate has been increased to Rs.500 on
failure of which you pay Rs.50 extra. This has more often than not led to
multiple and excessive shopping, buying those products which one does not even
require.
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