"Children are
completely egoistic; they feel their needs intensely and strive ruthlessly to
satisfy them."
— Sigmund Freud (Austrian,
1956-1939)
Word for the day
Jeremiad (n)
A prolonged lamentation or
mournful complaint.
Malice towards none
The Congress President made
an emotional speech while campaigning in Kerala.
The speech had some
parallels to the last speech of Mrs. Indira Gandhi in Odisha.
In the meantime the Congress
Vice President has reported threats to his life.
What's happening?
First random thought this morning
My all time favorite Saratchandra once wrote "There is no
eternal truth. The truth we consider eternal are mostly contemporary and lose
their relevance and acceptance with change in time, place and
circumstances."
For ages people believed Earth to be flat & stationary and Sun
rotating around it. The venom which is medicine for snakebite is deadly poison
for a healthy person. Once British Empire, USSR and German wall all looked like
lasting till eternity. Only a few years back, INC appeared like the only party
competent to rule India.
Dotcom 2.0
From my recent interaction with some e-commerce entrepreneurs, PE
fund managers, angle investors and VCs who have invested in these ventures, I
could get little insight into this business model.
By all means, the ecommerce business in India is still in infancy
stage. Regardless of few Unicorns, the space is replete with half baked &
ill conceived ideas, most of which may be commercially and financially
unviable.
There is absolutely no doubt that e-commerce and m-commerce
business will grow exponentially in next one decade. As a consumer I will
definitely benefit from the economies of scale and convenience.
But as an investor, I am not sure. In fact, I am worried about the
collateral damage that will inevitably be caused due to very high failure rate
in this space.
I would like to share some random thoughts on the sector with my
readers.
(a) In my view, the B to C
(business to consumer) product sales and delivery business in India will be
dominated by 3-4 large market places and manufacturers themselves. The business
may get highly localized in terms of warehousing and delivery once clarity on
taxes emerges and GST is implemented. Small and medium sized businesses will
increasingly want to sell through large market places rather than selling
directly. The logistic matrix for the business, as it exists today, may undergo
serious changes in next three years.
(b) The 3 D's of the B to C
model, i.e., Discounting, Discomfort (lingerie, sexual health products etc.)
and cash on Delivery may diminish in relevance as the market and audience get
mature.
(c) The services will grow
faster than product. But the revenue model will have to change. No one is
willing to pay for the services, arguing that even Google, Facebook and Whats
App do not charge us.
(d) The largest opportunity
is in financial services, health advisory and education & training.
(e) The services such as
market place for used articles, matrimonial services, job search etc. be in
demand but not financially viable.
The positioning of the
market place for used article is particularly poor. One, the business lacks and
entry barrier or innovation. Two, no one stops, Amazon to add another icon on
its home page to provide this service. Three, the marketing tactics used by
these entities ("Sell your useless and old stuff") is inappropriate.
No one is interested in buying "useless" stuff.
(f) There is a serious lack
of innovation in India. Most ideas are borrowed and may not be suitable to
Indian markets and consumers at large. Targeted at a select class of customers,
these ideas are not scalable and hence not financially viable - just as
sustenance farming....to continue
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