Isn’t it interesting that everyone is suddenly announcing ambitions to be profitable soon? Supposedly, Shopclues is confident of breaking even by 2016 apparently making a mark as the first ecommerce company to do so. Then there’s Myntra who was probably the first to mention the P-word. Jabong expressed confidence in achieving profitability after integrating with GFG. But Paytm has probably been the loudest so far about achieving profitability by 2017.
We can add one more to this list. Online marketplace Snapdeal is working towards achieving operational profitability in three years for which the ecommerce giant has been concentrating on building the requisite infrastructure. “More specifically in the next three-year period, at least in our business, I feel fairly confident that we will be at that point of profitability,” Snapdeal CEO Kunal Bahl today said at an International Chambers of Commerce event.
The existing infrastructure gaps are being taken care of, through investments.
“We have to frontload a lot of our investment to build infrastructure, but I don’t think we will have to do that forever. Today we are building essentially highways of e-commerce, but there are only cars on it. As number of cars increases on it, the economics will start marking sense,” Bahl said.
Kunal Bahl is of the opinion that front load capability needs to be pumped into ecommerce business to achieve profitability. Taking the example of global ecommerce giant, Alibaba he explained how the Chinese ecommerce major had become profitable last year after not being profitable for years.
He also said that in addition to generating jobs, Snapdeal is also looking at partnering with companies that can provide the support system it needs to scale up to its ambition.
“We now work with 60-70 logistics companies across the country. We work with India Post very successfully where they are delivering hundred thousands of packages daily. Growing up everyone use to tell me India Post service is not great. We have been pleasantly surprise how good their network is,” he said.
It is no secret that all the ecommerce players are running on losses currently, all working towards the larger picture of profitability “soon”. For any of the ecommerce players reading this, we want to say – It’s not just you, even we are waiting with bated breath to see who touches that line first!
After dwindling with her family business, into travel and hospitality, for more than 3 years, Pooja Vishant found her true love in writing. Happy-go-lucky and cheerful, she loves pink; so pink is the way to go if you want to get into her good books. The Associate Editor keeps track of even a leaf that has moved in the ecommerce world!
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