Sample Material of Current Public Administration Magazine
Information and Communication Technology
India’s e-commerce Industry
App-based cab service provider Ola shutting down TaxiForSure, which it had acquired for $ 200 million in March 2015, and online retailer Snapdeal doing the same to fashion portal, Exclusively.com, point to a clear trend of consolidation now underway in India’s e-commerce industry. The underlying driver is a drying up of fund flows to a sector where firms are largely start-ups with young promoters having little money to put in themselves and, hence, overwhelmingly reliant on private equity or venture capital investors. Indian e-commerce firms raised a record $ 8.4 billion of capital in 2015, against $ 6 billion the previous year, according to the financial services giant Goldman Sachs. Such funding has, however, dipped by around a quarter this year, as investors are now hesitant to put money into start-ups who use it for even day-to-day operations. This kind of “cash burn” cannot obviously be sustained too long; businesses at some point have to generate revenues that can at least cover operating expenses, even if not fresh investments.