April 1, 2020

Ecommerce Business Model | Case Study | How Ecommerce in India earns? | Hindi

We often see in news that every Ecommerce is in loss Sometimes Snapdeal faced a loss of 500 Cr or Flipkart faced a loss of 1000 Cr What is the problem in their business model due to which every ecommerce is in loss? Hello friends,my name is Sahil Khanna,you are watching Intellectual Indies and today we will tallk about Ecommerce Majority of ecommerce nowadays is in loss But why is it so? Directly they are buying from companies at good margins But still company is paying from its pocket when it gets delivered to end user What is this happening? To understand for eg,there is juicer grinder worth 1000 but amazon buys it worth 800 from the company And we think company margin of 200 is saved But there are many additional expenses involved Major cost is Logistics Cost If any product is coming at your place,so the logistics cost which is being spent by the company is 20-25% If the product is light,it will come by air and if it is heavy it will come by land Let’s take a real life example that you want to send a product from delhi to chandigarh How much logistics cost you need to spend to send it to chandigarh? If you are sending by surface or land,you have to give Rs.110 flat Additonally,there will be 20% fuel cost If its COD,then Rs.25 or 1% of amount have to be given to them Then the packing cost involves Rs.18-19 per running feet Running feet is if you have a product,then add length,breadth and height in feets and get it multiplied by 4,you will get running feet Multiply that running feet by 19.5,that will be the packaging cost. Total will be the Logistics cost They have also given additional service tax for that. They are also paying salex tax and tax,and if they paying through Payment gateway rather than COD,then cost is involved for payment gateway as well We have not added employment salary,operation,building,website running and advt cost yet So why ecommerce are still working on loss making propagation? Every company needs it First Mover advantage For eg,paytm. Everyone had in their mind that PayTM is the first payment gateway So everyone approached PayTM after demonetization Ecommerce company wants the same So whenever there will be ecommerce need,first demand will be of Flipkart,Amazon,Snapdeal,Jabong,myntra All these brands will be in your mind Then they will earn money from you Majority of companies are running ecommerce to take money from investors So this was the main business of ecommerce Why are they in so much loss Why no ecommerce in India is profitable So guys,this topic ends here. If you liked it,please like,share and comment. Do not forget to subscribe

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