India’s biggest investor, Rakesh Jhunjhunwala isn’t very happy about the Indian e-commerce players!
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Leading investor and trader
"Most of the big companies globally have been built from the profit of cash flow and not investors' money. I would like to see online companies with a profitable model and there isn't any. I will believe in it when they sell at an economic price," Jhunjhunwala said while speaking at the Retail Leadership Summit in Mumbai.
"I will consider buying
After raising $210 million from DST Global and Tiger Global Management in May 2014, Flipkart's valuation has swelled five times, presently standing at $15 billion.
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India's ecommerce market, which is expected to see its peak time in coming years, would rise to $50 billion by FY20. It presently stands at $12 billion, as per the Boston Consulting Group.
At this point, many online retailers go through years of operating losses, because of high initial investments and heavy discounts offered to attract consumers. So much so that over the past few months, some online retailers have avoided heavy discounts so that they can shore up their finances.
And now, most offline retailers plan to set up portals where they can sell their products online. As per a report from BCG-Retailers Association of India, Internet users are expected to grow to 650 million by 2020, which means that digital influence would be a mightier pervasive force, leading to retailers reinventing themselves.
However, because of less discounts, people are moving back to offline stores. As told yesterday, it’s a good time for brick and mortar retailers because of less online discounts being a turnoff for customers.
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