1st May is just a couple weeks away. And we cannot wait to see the way Myntra fares. Going mobile! What will be the result? The management and directors may have studied the ins and outs before making a decision that has the ability to set a new standard in the world of eCommerce in India;
Yet, we believe the results will be far reaching. And astounding. And we wish to witness this massive upheaval. Economically, India has had “boom” periods when industry and commerce is concerned, after independence.
At one point in the 80’s there was the manufacturing boom- that gave rise to small scale industries. Afterwards came the dot com boom, when internet started becoming mainstream; sometime in the 90’s. And now we have the eCommerce boom.
Investors, from India and abroad are busy pumping money into eCommerce organizations. Now, valuation is becoming more important than current ‘profitability.’ It’s a fine balance to strike for any company.
It matters not if you are a start up, an age old manufacturer who is going on-line or an already large MNC, with an eCommerce portal. What matters today- is the future. Literally. This is the reason we find so many disruptive companies, even at start up level, today.
E-commerce firms like Flipkart, Snapdeal, Ola, Zomato, etc, are already market leaders. These companies are making a huge impact on the Indian Retail Landscape. In less than 10 years since inception, Flipkart has made a mark in the minds of people. With such a land of opportunities awaiting you, it’s no wonder, that eCommerce is a disruptive area to work in.
These brilliant ‘punny’ communications between brands on twitter are a testament to the power of these eCommerce organizations!
At IntelligenceNODE, being a start up, we scale new heights every day. And we believe that any company has the power to make it big, with the right attitude. But this is not just about ‘mentality.’ This is about hard facts.
As a retailer, who wishes to become a valued and trusted eCommerce player, we understand the full stops you face. In this competitive landscape, it is always great to understand the people you might have to work with.
Since, eCommerce companies operate with a different set of rules as regards sales and discounts, there is always a different way to measure their success. And, yes, we understand the juxtaposition of enthusiasm and apprehension that you face when you enter this highly competitive market.
Valuations for early start ups are soaring, and companies are able to demand twice or thrice their value. To understand the process, we need to understand how a company is “valued.”
For the uninitiated, usually, companies are valued based on many parameters like profit after tax (PAT), earnings before interest, taxes, depreciation and amortization, or Ebitda (a measure of operating profit), and cash flow. But, these methods of valuation don’t apply to Internet companies, because, simply put, they function differently.
So investors have devised a way to measure the value of internet companies- called Gross Merchandising Value or GMV. In the pursuit of transparency, when a company says its annual GMV is $100 million, it may actually be getting sales, say, between $20mn to $70mn.
According to the pundits, the market during the dot com boom was largely created by investors; irrespective of the market reality. But now, many marketers and investors have a great belief in the authenticity of GMV and other factors that matter for creating a higher valuation.
In spite of the concept of GMV being vague for many, it helps in quantifying and focusing on goals. This is what investors are looking for. But in today’s world, absolutes are valued a lot more than partially formed ideas. These are the ones that reach breakeven point.
After associating with quite a few investors and eCommerce players alike, we have come to the conclusion that many a times, quantifying your worth- reaching a goal- may not be as easy as planned; the major view is that there will be a bust in this eCommerce based economy.
We beg to differ though. There is a simple reason for that- Big Data. Big Data has managed to make probabilities- into realities. Prediction, recommendation and direction are all easy in the domain of big data. The challenge is utilizing a resource to its maximum capacity.
It is our belief that the eCommerce industry today is much more aware, and therefore can make maximum use of newer technologies that are popping up every moment. We also believe that when the financial gurus and analysts hand out these decisions, their knowledge is a very valuable resource. But now, the other side, too, has their own way of getting precision and perfection in their reports- leading to airtight decisions.
Many organizations are already using insights on the highway to success. But it is not just their in house and logistics questions that big data answers. These answers also lead to a great social media strategy and marketing strategy. All this translates to higher rates of success. And greater ROI. Be it logistics, Sales, Marketing, After Sales Support, and everything in between; virtual or reality; the ability to develop and utilize Intelligence based services is a great opportunity.
And in the pursuit of this excellence and a higher level of awareness, we learn and share new insights every day!