Ecommerce stores in India has taken over the brick and mortar stores up to a certain extent. Now it has become impossible to ignore the attractive deals and discounts offered by them. However, it is really disappointing to know that despite of earning huge revenue every year, many ecommerce stores in India are reporting huge losses every year. Considering all the reports true, it is perfect to say that ecommerce companies are forming a suicide squad. Because there is no point of doing business which is infected with insanely huge losses. And it is like a suicide to continue doing such a business.
To go deeper into the explanation, let us discuss some reports from valid sources.
1. TOI talks about SnapDeal
A quite recent report by Times Of India shows that SnapDeal loss has risen from INR 270 crore in March 2014 to INR 1,350 crore in March 2015. While there is not much focus on profit margin, hence it is easy to cognize that the firm is not profitable.
2. Economic Times talks about Amazon and Flipkart
A very recent report by Economic times says that Amazon India had incurred a huge loss of INR 1,724 crore in the year ending March 2015. Amazon is making money via its Seller Services and sales of Kindle e-reader. Despite being the world’s largest ecommerce business, Amazon is facing stiff competition with its rival Flipkart which is also accountable for its losses.
The same report talks about India’s largest ecommerce firm i.e. Flipkart which had incurred a heavy loss of INR 2,000 crore in the year ending March 2015 which had also included the amount spent on the acquisition of the fashion store Myntra. However, the losses in the previous year 2014 were accounted only for INR 715 crore.
3. TOI talks about Jabong
TOI reports Jabong’s loss for first half of 2015 was reported as INR 227.4 crore and revenue as INR 410.7 crore. Again there is no data regarding the profit margin the company has generated. Still the loss seems big enough to rot the revenue of the company.
The Suicide Squad of Ecommerce firms
By taking a quick glimpse to the reports mentioned above, it is easy to ascertain that ecommerce companies in India are failing continuously. They are generating huge revenue but also huge losses and becoming unprofitable. That is why I call ecommerce companies as the suicide squad.