1.Deals and Offers:

Deals and offers are one of the five reasons why online retail industry into losses. Why does a company offer deals? At what point of time companies offer them? 4 times

Clearance:

1.Few items might include leftover at some point of time which can’t be sold out anymore after launching a product  2. if the product failed significantly to fulfill the customer needs. These two scenarios we usually have a clearance sale.

Product or company launch:

Often, deals offer at the time of launching a product to get established and familiar with more number of customers.

Seasonal sale:

Retailers often come up with good deals in the festival season to catch up the big sale as the majority of the people spend money. Manufacturers/Wholesalers offer a lower price to retailers as they buy in larger quantity so the retailers would provide those margins to end customers.

Endless offers:

Unlimited offers are playing a vital role in pushing eCommerce industry into losses. eCommerce players are pumping a lot of money to establish and grab big market share so quickly. Eventually, it became a habit to customers to look for a deal before buying. Fortunately or unfortunately we have many startups coming up every day in the eCommerce space, so the client has good choice to look for deals. This scenario pushes them into confusion, eventually, to retain customers the deals are becoming full-time deals. Startups are showing up this loose into the account of promotions.

2.Hyper Growth:

Every part of the body has to grow naturally per age from the stage of childhood, abnormal growth of any on part is called as cancer in medical terminology. It could see the same in Indian eCommerce industry, and entrepreneurs are getting succeed to estimate the growth; apparently, they are getting failed to handle the growth, reasons may be numerous. Quick infrastructure setup, quick funds, quick delivery setup, fast talent pool and lack of leadership. Hyper growth demands everything quickly as the growth is faster than quickly.

3.Delivery and Logistics:

Customer chooses online shopping for two advantages 1. lower price than store 2. delivery at the door step. There is a sudden demand in transportation and logistics industry because of the hyper growth of online retail, but supply with expertise is little sluggish to catch up the market. Apparently, due to lack of good experience, I believe we are failing to minimize the cost of delivery and logistics. It would take some more time to streamline this chunk.

4.Technology needs a lot:

Technology is the strength of startups, the majority of the founders and co-founders are techies. So it is easy to develop an application or a small platform, however, when a company grows, the requirements also grow in parallel, a team of two or three can’t handle, either you will be forced to outsource or set up a bigger team. Create a group with 0-5 yrs. of experience can be easily but to get senior resources, manager, and leadership on-boarded for startups will end up investing a lot.

5.Operations cost:

Operations is another big animal to handle, the majority of the online companies’  leadership doesn’t have prior experience, they are just passed out from college. For instance, if you want to set up an IT company it is easier to recruit technology experts. Why? Since IT was established around 20 years ago in India we have a right amount of talent pool to pick up, eCommerce is getting picked up for the last three years, so naturally it takes some time to create a talent pool in the market for the experts to manage the operations.

The Takeaway:

1. We need to wait for some time to react the nature.
2. Expertise has been getting built towards eCommerce, so it takes some more time to stable and sees the execution mode towards profits.
3. Hyper growth is always danger to deal.
4. Always be careful while Setting the expectations to the customer.

Let nature takes its time 🙂

Narasimha Mohan

He is the Author, Product Specialist, Business Consultant, Entrepreneur, Public Speaker, Thought provoking writer, and Joke writer. Follow him on Twitter