The online travel sector comprises more than 50 per cent of the e-commerce industry in India, which is currently estimated to be in the range of US$ 11-16 billion. Given its size and high levels of user acceptance, this segment has seen the largest number of start-ups – estimated at more than 200 businesses.
Greyhound Knowledge Group believes that it’s important to first understand why investors are willing to invest enormous amounts in e-commerce companies. “Investors who have invested an enormous amount in e-commerce companies expect a huge profit in return. The truth is that e-commerce players make a huge loss and raising funds is the only viable option to stay in the business and ahead of competition. While the cost of creating mobile and web commerce has declined considerably in the last few years, the key to survival of e-commerce model is customer acceptability and quick adaptability to changing market dynamics,” elaborates Sanchit Vir Gogia, Chief Futurist, Founder and CEO, Greyhound Knowledge Group.
“Rising valuations can be considered as a herd mentality as there are more than enough investors willing to invest in e-commerce players. E-commerce has been a flavour for a lot of investors and thus the push to create a demand for such investments,” adds Gogia.
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