Fast growing Indian e-commerce market is now slowing down
As per TOI report, there has been a huge difference in online retail market from May 2015 to 2016 when we talk of the value of goods sold. While last May saw the giants having gross merchandise value (GMV) run rate of $9 billion, this year, the number was barely about $10 billion, which suggests an 11% annual growth.
GMV is termed as the overall sales that an online marketplace registers, excluding discounts and returns.
As per data,
Could this be because of reduced discounting?
After Indian government’s new guidelines in March this year, most e-tailers reduced their promotional campaigns, as they can’t offer direct discounts to buyers. This could also be the reason for slow sales, since these discounts attracted most buyers to these websites.
"The moment of reckoning is coming or may have come already for Indian ecommerce companies. The ease with which these companies have been able to raise money from VCs may have made them all sloppy, and the test then will be which ones can now work on the 'building-a-business' channel. As for whether the fault lies with Indian consumers for not jumping fast enough onto the online wagon, it is a chicken-and-the-egg problem that we have to deal with," says Aswath Damodaran, professor of finance at the Stern School of Business at New York University.