The success of Groupon – an online business based on the group buying model – in the US, attracting a valuation of $1.3 billion seems to have triggered a frenzy in the Indian Ecommerce space with investors and venture capitalists vying to create India’s first similar success story. Industry experts brush this off as just another me-too investment mania which is a consequence of insecurity and ignorance. This has however resulted in a few Indian online group buying websites such as WanaMo.com and Grabbon.com being acquired and a third website Taggle.com has successfully obtained funding commitments amounting to $ 8.75 million from venture capitalists.
But what exactly is online group buying model of Ecommerce? It is not an out-of-this-world concept. Simply put, it means “bulk discounts” and Indian’s are probably leading the global pack when it comes to negotiating lowest rates. So will duplicating this concept into the Indian Ecommerce space work? Historical data from the recent past indicates negative. This is not the first attempt at replicating successful US Ecommerce concepts in the Indian scenario. We had bazee.com (India’s own ebay.com), rediff.com or indya.com (India’s answer to yahoo.com), guruji.com (a google.com clone) – all of which could not reach the glorious heights of their western counterparts. Will an Indian Groupon clone meet the same fate? Most likely!
According to industry experts, the regular Ecommerce in India has yet to scale greater heights and its vast potential is largely untapped. We have not even scratched the surface of India’s $300 billion retail opportunity. Apart from the online travel segment led by IRCTC.com the other segments do not have a single success story comparable to those in the US. Indian businesses and businessmen would be better off scaling up the Ecommerce space instead of blindly replicating new US Ecommerce concepts.
Serious investors and entrepreneurs interested in an in-depth report on India’s Ecommerce space can lookup http://www.indiareports.com/summary/ecommerce_in_india.aspx
Source: www.alootechie.com
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Yes I completely agree with you that Indian net market is still untapped and has huge potential for the online group buying industry. I do not believe that the sustainability of such companies are at risk. Its human nature that we are always skeptical about the new and unknown stuffs.But I guess its here to stay. Internet is penetrating deep into Indian masses. This is just the beginning and people will fall upon internet for any and every thing they require in the near future.I would like to highlight some of the facts in this case like:
-India has 81 million internet users
-Indian netizens are the India is now worldâs third biggest online shoppers
-The government has planned to expand broadband coverage to connect every Gram Panchayat by 2012.
-More than one million developers and entrepreneurs from 180 countries use Facebook to spread their business and India is one of them.
So I believe its going to be a huge market but obviously only the ones with best deals and customer service would stay.
There is one more new entrant in this field CityOffers. Though the site is not yet ready but they have already started with major contests in facebook for their Ahmedabad, Kolkata and Mumbai page with giveaways such as mobile phones, CityOffers coupons and movie tickets!