Chairman of Manipal Global Education, T V Mohandas Pai has severely criticised the approach of e-commerce players for offering discounts and termed them as subsidies. He predicted a shake up in the e-commerce space in the next couple of years, or “even earlier”.
Pai, faulted the business model adopted by e-commerce players, saying it promotes growth without building customer loyalty. Indian e-commerce majors like Flipkart and Snapdeal are just trying “to grow fast by giving subsidies, which is wrong because there is no customer loyalty”.
“I think, a good shakeout… may come, maybe, in the next one or two years. Some of the weaker players will fall,” he said.
Earlier this year, a report by the Indian financial services unit of UBS Group AG said e-commerce is a viable business in India, although online retailers may take as long as five years or more to become profitable and could be overvalued currently.
