Sure eTailing is growing by leaps and bounds. But eTailers are booking more losses than profits. Deep discounts and returns are a downward spiral they can’t pull out of by Vishal Krishna & Abraham C. Mathews
This scene repeats every day. Every morning, trucks loaded with crates of unsold and damaged goods returned by e-commerce companies and other retailers are brought to a 2,00,000 sq. ft. warehouse of Reverse Logistics (RLC) at Tumkur Road in Karnataka. These goods are then cleaned up, refurbished and then sold on RLC’s stores and website greendust.com.
Sanchit Vir Gogia, CEO of Greyhound Knowledge Group, says most investments were made between 2013 and 2014; so funds may want to exit before 2018-19, since VC fund cycles last only for five years. Institutional investors look for an exit by either selling back to the promoter, or to another investor or to the public through an initial public offering (IPO). An Indian IPO looks remote when there are no profits on the horizon. Making new investors pay more than the current valuation could be a tough ask.
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