E-Commerce is a huge gamut of things, but when most people talk about e-commerce, they often are referring to e-retail. E-Retail is a space where countless number of companies and individuals have invested money. If you look at the vast majority of players in the space, most of them are not wildly profitable.
Amazon recently posted a loss. Apple’s App Store for all its hullaballoo is only profitable because Apple sells all of their own software through this single platform; barring that they would just about break-even. Closer home, Flipkart is yet to post a profit.
E-retailers tend to be profitable when they are starting out, reach a peak and then as they scale the business upwards, the profitability does not seem to sustain. I think the problem is with the technology.
We all remember pagers. Pagers were the transition technology between the telephone and the mobile phone. The only achievement of pagers was prepare the mindset of people to embrace communication on the move. They were not wildly profitable and neither were they around too long.
The story of e-retail is similar. Its a transition technology which prepares the mindset of people to purchase without going to the store. It is not the optimum solution and the day an alternate solution arrives, in the form of Augmented Reality and 3D projection, the real e-retail era will begin.
Until such time, there are those who will continue to play with laptop based retail and wonder why it is so difficult?
2 replies on “E-Retail – The Transition Tech”
the profitability does seem to sustain…
I am yet to come across companies with good margins and sustained profits. There might be niche players but none of the major players.