It’s high time that the infighting between eCommerce startups out of India stopped, specially Snapdeal and Flipkart.
The writing is on the wall, and there is no way that these companies have enough resources to compete with say, companies named after rivers. If you truly want to beat the competition, learn from Indian history, stop being the princely states from 1800’s, and eat the humble pie. Creating lobby groups to seek help from the govt. will also not work, but it should facilitate in something else.
Restructure your businesses
I won’t comment on the burn rate and foolish salaries. You know why you burnt what you burnt. Now bury the hatchet and join forces.
Bear me for a minute.
I am not asking you to merge.
I am asking you to spin off a part of your businesses and merge them to create a B2B platform.
Something I realized in 2010 was that every single eCommerce company created in India is running after the same customers, signing up the same vendors, to build the same catalog and just making google and facebook richer.
Each of you is spending loads of money maintaining staff to do these things, which are just copies of copies of copies. This is just wastage.WHY everyone does it?? I have never understood.
Even then, your competitor maintains better catalog range and depth.
What I propose is, spin off these businesses into one single business. So create a company called FlipDeal of something. Put all your vendor managers and catalog operations, warehousing and all others in this business.
Let Snapkart (eKart restructured) deliver your last mile.
Flipdeal will have all vendor relationships, catalog, and costs negotiated from the vendor.
This business is your Alibaba for B2B, and you source all you sell through this company.
Flipdeal has to earn its own profits, and either it is by squeezing its vendors or you or selling to new businesses in Tanzania or competitor like Shopclues, it’s up to them. You (Flipkart/ Snapdeal etc.) manage the brand, and the customers and marketing.
Your FDI pains will ease off, and you will be able to grow the pie, get new avenues for sales, reduce wastage and focus on essentials.
You will enable mom-pop stores and every single retailer and entrepreneur in India.
If they buy from Flipdeal, they are all joining together in this fight against your competitor, and you do get your cut.
You created one space for all customers, now create one space for all businesses, rehashing the same investment in technology and content.
If You get an export license, you can consolidate all exporters under one roof. You earn a share of profits from this entity, you sell to consumers.
I know it sounds bizarre, and your first instinct will be to reject it as madness.
But I am sure that it will start some conversation somewhere, that might end up saving a lot of jobs some years from now.
(views expressed here are my own and don’t reflect views of any of my employers present or past)