The future of e-commerce is bright, says Sachin Bansal

The future of e-commerce is bright despite cash burn and losses incurred by e-commerce players amidst a drying up funding environment, as India is still an under penetrated market, said Sachin Bansal, Flipkart Co-founder and Executive Chairman, who was the first speaker at the third edition of the Global Mobile Internet Conference that opened in the city today.

Stating that e-commerce companies will have to continue to invest in talent, physical supply chain and logistics and in building systems and processes to support the inevitable growth of e-commerce in the country before focusing on becoming profitable, he foresees that “Only those companies that bet and invest in data and AI will survive in the next 10 years. Cash burn and cash crunch is a function of the stage of the market. The question we should be asking is when is the right time to stop burning cash and switch to profitability, which can be done anytime we want to.”

Asked whether he was afraid of the prospect of either being bought out or destroyed by American and Chinese firms like Amazon or Alibaba, Bansal said “absolutely not.”

Explaining that India is a very different market, he predicted that business models that are unable to get the masses of India on board and are just serving the elite who look much like Americans and European in their income levels and behaviour, will be bought out or will have to shut down, as already seen over the last 12 months. Businesses that are able to Indianise for Indian needs and aspirations and are able to solve local problems using local resources in a much more efficient way will survive.

“If you want to beat NASA, don’t replicate the NASA model, but be like ISRO which did the same things at much lower costs. My strong belief in Indian management and entrepreneurial talent leads me to believe that there will be a large number of Indian companies, which will not only stand on their own but also will be buying their American counterparts and will take their model to other developing countries as it is the best suited model for other developing nations,” he said.

Bansal said digital payments is the largest bet in the mobile internet space from the technology point of view, becoming an enabler for a whole set of other businesses, whether it is selling cabs or mobile ads or any kind of transaction on the internet.

To accelerate the use of digital payments, Bansal feels the government should subsidise low-cost $100 smartphones and bring it down to $50.

On challenges faced by citizens due to demonetisation, he said it was a good move which will reduce black money and have a large impact on India. It is an indication from the Centre that we need to move on and use technology more and more. However, the execution should have been better. Printing of enough currency and recalibration of ATMs could have been facilitated with more research and recommendations of an expert panel at the idea stage itself. While bureaucrats do a great job in administration of the country but they lack in subject matter expertise; giving such a technically challenging problem to bureaucrats is not the right thing, he said.

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