I wonder how the ecommerce business can be sustainable: Kumar Mangalam Birla

Kumar Mangalam Birla, the renowned Indian industrialist and chairman of Aditya Birla Group, has raised concerns over the sustainability of e-Commerce industry. As per an Economic Times report, the industrialist said that the deep-discount model followed by Indian retailers is unsustainable and will soon come to an end as investors would surely demand returns.

In an exclusive interview, Birla said, “I understand the valuation play. At the end of the day the financial investor will have to make returns. One thing I am sure is that you can't have unlimited access to capital funding. Therefore the question that comes to my mind is whether the deep discount model is sustainable.”

This is the first time Birla spoke after his name surfaced in the coal mine allocation controversy in 2013. He termed the entire incident as ‘shocking’ and said that the group had bounced back after that. "It was a shock and was completely unexpected. But it did not come in the way of our growth as we are a resilient group. It is best not to get emotional about these things,” he expressed.

When asked if the entire incident was a part of political vendetta, Birla responded negatively. Birla, along with former Indian Prime Minister Manmohan Singh was summoned in the coal block allocation case but in April this year, the Supreme Court of India stayed the orders by the lower court.

Meanwhile, praising the Narendra Modi-led government, Birla said, "When you get a business or a company that is ailing, I do not think turning it around in one year is realistic. I have a lot of faith in this government…Two sectors have taken off - one is coal in terms of production of coal. For the first time in many years, we are not struggling and have sufficient coal in our plants, which is a very big deal. Roads have taken off, which is big.”

The ET report also mentioned Birla group’s plans in the near future. As per the reports, the $41-billion group will invest more in its non-commodity business, including a $7-billion investment in Idea Cellular, India's third-largest telecom company by number of subscribers.

Along with that, the group also plans to get into the health insurance, housing and finance and also garment business. The group would also foray into generation of solar power, one of the priorities of the NDA government.