Technology

We have already covered the phase of Indian eCommerce Startup Valuations breaking through the roof between 2013 to 2015. The year 2016 saw funding crunch, the sector has had a reality check. GMV is no longer the holy grail and the focus has now shifted to metrics such as the net promoter score, user monetisation and customer experience. Also, there is a growing recognition of the fact that India is different from China and may not necessarily mirror the early e-commerce trends and trajectory in China.

Indian e-commerce firms have pursued several initiatives including increasing the commission rates (at an overall portfolio level), controlling the logistics costs (particularly returns), rationalising discounts and shifting the portfolio mix in favour of high-margin categories to curtail the losses and create a foundation for achieving profitability. Regulations have so far been

The Indian eCommerce Saga trails the Americas by a decade. 2013 to 2015 were eventful years for the Indian internet sector. Overall, 2015 GMV growth for the e-commerce sector saw the fastest pace in the past five years, despite a higher base. Funding activity, too, peaked in 2015. Investor optimism was high as well valuations doubled in many successive rounds of funding within a gap of just a few months. There were several large funding rounds such as Flipkart’s US$1 bn one, followed by a couple of US$700 mn funding rounds over the next six months, valuing the company at US$15 bn. Snapdeal raised over US$600 mn in 2014 and followed it with another US$500 mn round in mid-2015, while Paytm raised US$680 mn in Sep-15 from Alibaba and Ant Financials (Alipay). Ola also raised over US$1.1 bn between Oct-14 and Nov-15, in three rounds of funding

The Flawed GMV Based Valuations Model
GMV was the most widely tracked key performance indicator for ecommerce companies — not only internally, but for investors as well. Companies expanded GMV without focusing much on unit economics. This led to an increase in discounting and marketing