Down-round for Snapdeal. What does it mean to other start-ups ?

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Bharat Sabnani, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur

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Snapdeal has had a poor last year with their losses increasing from Rs 1328 crore in 2014-15 to Rs 3316 crore in 2015-16. This in addition to the speculations from investors has resulted in down-round for Snapdeal. A down-round means a reduced valuation of the start-up compared to that of the previous round. This down-round can affect the investors sentiments and its founders but it can also reduce the short-term pressure that Snapdeal faces. The reduced valuation can actually lead to smart business practices and making the business sustainable.

Other emerging start-ups can also learn from this to focus on effective business models instead of short-run marketing gimmicks like deep discounts. The flow of money and investments are not infinite and the start-ups should keep this in mind. The aggressive funding will eventually come down and this will balance the current start-up ecosystem of India. This is just the start of down-round and all the start-ups should make it a point to make their businesses sustainable, so that they are not affected by the increase or decrease of their valuations.

Budget 2017

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Amrutha Bhamidimukkula, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur


The country is fast moving from desktops to handled devices and smartphones are improving in their penetration and ease. This highlights the prominence of mobile banking in our lives. Quick adaption by a large chunk of the population, though sudden and to some extent forced, to mobile banking and e-wallets was one of the saving graces during demonetization. Making smartphones more affordable and promoting cheaper data services will be one of the key expectations. Affordable mobile handset or consumer durable items of a certain price limit may be given concessions on duties.

For the e-commerce market, particularly, major businesses have demanded clarity of FDI in B2C e-commerce through automatic route. Last year, the government allowed FDI into B2C e-commerce but disallowed the marketplaces like Flipkart and Snapdealto offer discounts to consumers thus ending the discount wars. Though consumers enjoyed the discount wars, brick and mortar stores claimed they suffered hugely due to such business tactics.

The government will want to put the country back on the high growth path. So, improving customer confidence and consumer spending will be vital as well.

Flipkart and Ola batting for law against Capital dumping

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Krishnachaitanya Potturi, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur.


Recently, we saw the headlines that Flipkart’s Sachin Bansal and Ola’s Bhavish Aggarwal are trying to seek government protection against capital dumping by global rivals. Now, prominent venture capitalist Vani Kola, founder and managing director of Kalaari Capital has also joined the controversial debate.

Bizarrely, they never felt the need for any playing field, level when Ola and Flipkart were busy pulverizing other local players market with foreign funds. A total of $3.2 billion in foreign funds has been invested in Flipkart and is even registered in Singapore. The majority of Flipkart’s capital is in the form of foreign funding. Founders Sachin and Binny Bansal together hold only a 30 percent stake in the company. Ola’s Bhavish Aggarwal has secured sufficient foreign investment to the point that he and his partner Ankit Bhati currently own only 10 percent of the firm’s shares.

Flipkart, Ola and many, many other startups in India have entirely been set up on a copy-paste model. Flipkart took 9 years and US$3.5 billion to grow to where it is. Amazon simply took less than $2 billion and built a larger and better-loved business in India than Flipkart that too in 1/3rd the time. Ola went the same path. It raised $1.3 billion and spent a lot of that to build a business that it asked for $5 billion to sell. Uber  just spent 1/10th that amount – i.e. around $500 million to build a larger and more loved business in India than Ola, once again, in 1/3rd of the time.

Current investors in Flipkart have cut its on-book valuation from $15 billion to $5 billion.  Ola and Snapdeal have been devalued by their investors too. Hence the request to grant protection and ask the government to let them put foreign money in Flipkart and Ola and not let foreign money go into Amazon and Uber. While the absence of Indian-ness in a Flipkart or Ola works as a fitting response, the allegation has implications beyond an India-versus-others debate. ‘capital dumping’ is no longer about MNCs versus Indian companies but bigger versus smaller players, regardless of founder origins and nationalistic pleas.

India may face pressure to open up Ecommerce Sector

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Rakshita Hichkad, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur

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Ecommerce has made it easier for top American brands to reach Indian customers, and has emerged as one of the fast-growing trade channels available for the cross-border trade of goods and services.

G-20 – the international forum for the governments and central bank governors from 20 major economies has asked various countries, including India for views on enhancing the readiness of countries to engage in digital trade, also how WTO can promote ecommerce and develop a framework to measure cross-border digital trade.

India’s say plays a vital role for the ecommerce to be included in the WTO’s agenda.

Technology enabled innovations such as Digital Payments, Hyper-local Logistics, Analytics driven Customer Engagement and Digital Advertisements has led Indian ecommerce industry to grow at a much faster rate.

Government initiatives such as Digital India, Skill India, Start up India and Make in India are also contributing to the growth of the ecommerce industry.

India needs to aim at empowering Small and Medium Enterprises to make use of the new trade regime on global ecommerce sector

Accepting Ecommerce for international trade will help India in the following ways:

-Minimize geographical isolation that will help Indian exports markets to reduce the costs of finding customers and accessing overseas markets.

-End the digital division that exists between the developed and developing countries

The main challenges for cross border digital trade are lack of international accounting standards and uneven acceptance of ecommerce.

Therefore, Indian Government should commit to be compliant with international standards and aim to strengthen ecommerce, devising investor-friendly guidelines to successfully make, transact and trade in India.

 

G20 summit – Focus on E-commerce sector.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Avijit Nigam, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur

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This article is based upon regualtion of Ecommerce sector across the globe and the discussion about the same in upcoming G20 summit.
In order to enhance digital trade across the globe, G-20 has asked its member countries including India to provide their views on e-commerce trade. This is mainly done to build a framework which would be used to measure trade digitally. G-20 might also consider the WTO rules for digital trade to provide the basis for rules and regulations.

An interesting point to note is that India does not allow foreign investment in the retail sector of B2C. Various e-commerce players such as Amazon, Flipkart etc. are functioning as marketplaces. India already has reservations regarding e-commerce in  WTO agenda.

This move is adopted as international accounting standards are still ambiguous. To enhance the participation, G20 had asked for SME’s in developing and developed countries to promote online trade.

Various considerations are in place to come up with a strong framework and because of this G20 is also collaborating with WTO ministerial conference. The sole motive is to come up with an architecture which promotes e-commerce with new rules in place.

Members have been asked to take into consideration digital trade and economic development while reacting to their views.

According to me, the way E-commerce is emerging, this is a good move. The total retail e-commerce sales are expected to grow from $1.9trillion (2016) to $4.05 trillion in 2020. So a common framework for all developing and developed countries would enhance e-commerce industry. The move to include SME’s will help investors to coagulate funds and come up with an effective commerce strategy. This would help them in the long run.

 

UPI set to soar and hit high targets

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Divyam Jain, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur

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In April, 2016, an immediate service platform was launched by the National Payments Corporation of India (NPCI) named Unified Payment Interface. It was designed with a vision of a more digital and less cash form of Indian society and market. With 36 banks allowing payments through UPI, this platform is charging towards its vision.

UPI provides hassle free transactions without the need of filling your card details etc to make the transaction. This makes it a fast way of making merchant payments, remittances, bill payments etc. As the user only provides a virtual address for the transaction, it adds an additional level of safety to the transactions. With all these features and facilities, UPI is set to hit the 1000 Cr. mark in January, 2017 which is quite a rapid growth as compared to only 90 Cr. worth of transactions in November, 2016. As per RBI data, the net transaction between January 1 and 19 was 990.18 Cr. while that of the whole December was 712.03 Cr. This shows the growth rate of the UPI facility.

Another factor that has contributed towards the growth of UPI transactions is the Demonetization announced in November, 2016 because of which a lot of transactions moved to the UPI platform and people became more aware of this facility and its benefits. Even with the numerous digital wallets giving competition to UPI by giving various deals and  fancy offers to the customers, UPI is still soaring and is targeting to surpass these wallets in the near future.

References

http://www.financialexpress.com/economy/digital-banking-unified-payments-interface-soars-set-to-hit-rs-1000-cr-mark/519865/

http://www.npci.org.in/UPI_Documents.aspx

http://www.thehindu.com/business/Economy/What-is-Unified-Payment-Interface/article14593189.ece

Indian online poker industry

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Aman Pasari, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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The next big thing in the online sector is the upcoming poker industry which has spread its wings very soon in India. There is a huge demand for this game in India and with more people getting interested in the game, soon enough it will see the horizon of unprecedented success in the country.

Poker is considered as a skill based game in many of the Indian cities like Kolkata , Gangtok etc. The Government’s ruling in the favour of gaming industry has given a boost to the industry.Gambling which is banned in India is all set to make inroads to the country as with advent of poker sites the new trends will set in and break the traditional barriers of gambling in India.

A court hearing slated for January could provide true clarity about the legality of online poker sites in India and whether or not the game is gambling.

According to a report from Scroll.in, the Delhi High Court will discuss the country’s fledgling online poker industry that includes more than two dozen sites. Whatever it decides would be binding and set legal precedent for the entire country.

Thanks to a ruling last month regarding rummy for real money, operators of online poker sites have become more confident with their businesses and are starting to market more aggressively.

It has been estimated that as many as 500,000 people in India play online poker for real money, which creates a market worth roughly the equivalent of $214 million USD. The market could triple in the near future if the game is completely approved by the government, one operator told Scroll.in.

So India is all set to brace the poker industry with open arms and it is likely that it will pave way for the casino industry to settle in the country where people are breaking free from the traditional mind set and are getting opened to a new way of living .