Info-tech

Why e-commerce wars are going beyond marketplaces

Priyanka Pani Mumbai | Updated on January 20, 2018 Published on April 25, 2016

ecommerce

Battles in court and on social media may well yield results, feel brand experts

The battle for supremacy in the online retail space has gone beyond the market to social media platforms –– and even to courts.



While mobile wallet company Paytm has dragged the country’s third-largest online marketplace, Snapdeal, to court on allegations of data theft, Flipkart’s co-founder Sachin Bansal and Snapdeal co-founder Kunal Bahl recently sparred publicly on Twitter.



Curiously, however, owners of start-ups believe that such spats will actually benefit the companies. “Any publicity is good for these companies. Escalating it to the social media comes with the chance that the matter will go viral,” said Rana Atheya, founder of online pet care portal DogSpot.



In March, Bansal and Bahl sparred online over the entry of Chinese major Alibaba into the Indian market. Bansal tweeted “Alibaba deciding to start operations directly shows how badly their Indian investments have done so far.” Bansal’s reference was to Snapdeal and Paytm, in which Alibaba has investments.



Bahl shot back tweeting, “Didn’t Morgan Stanley just flush $5-billion worth market cap in Flipkart down the toilet. Focus on your business, not commentary.” US-based hedge fund Morgan Stanley had marked down Flipkart’s valuation by 25 per cent due to poor performance.



‘Dents image’



Saurabh Uboweja, brand strategist and founder of consultancy firm Brands of Desire, said Twitter wars were avoidable as they hurt brand image. “There should be social media policies to check such situations. It just creates panic in an already fearful e-commerce start-up industry.”



A classic example of how things could go wrong is that of Housing.com, which got a lot of media attention after founder Rahul Yadav took to social media accusing equity firm Sequoia of poaching employees. Yadav had to finally leave the company.



‘More lined up’



Market experts believe that more such spats and wrangling are on the cards as the $6 billion sector braces for consolidation. E-commerce is facing a crisis on multiple fronts: declining valuations, regulatory worries related to discounts and drying up of foreign funds.



“It is like kids fighting when they are about to lose a game…the problem is that these guys have reached a point too soon without inorganic support,” said Prasad Ajgaonkar, a Mumbai-based serial entrepreneur and founder of animation firm Interactive Realities.

Published on April 25, 2016
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