#Asia Indian e-commerce set for a good shakeout in 1-2 years: Mohandas Pai


Many startups will die because they are not competitive and are only being kept alive with money, says the former Infosys director

mohandas pai

Predicting a “very good shakeout” in Indian e-commerce space, former Infosys DirectorT V Mohandas Pai slammed the exorbitant discounts and cashbacks offered by e-commerce players, calling them “subsidies”.

According to a report by the Press Trust of India, Pai trained his guns at Indian e-commerce giants Snapdeal and Flipkart, saying they were trying “to grow fast by giving subsidies, which is wrong because there is no customer loyalty”.

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“In the last quarter we have seen… Amazon has overtaken them because it has superior technology and better processes. Snapdeal has fallen back,” said Pai, who is now the Chairman of Manipal Global Education. “I think a very good shakeout… may come, maybe, in the next one or two years. Some of the weaker players will fall.”

On the startup growth scenario, Pai said: “Many of them will die because they are not competitive. They are being kept alive by dollars of money.”

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He estimates that, at present, 18,000 startups in India are creating a value of US$75 billion, with 300,000 people being employed in the space. This, he feels will increase to 100,000 startups with US$500 billion of value and generating 3.5 million jobs in 10 years.

“Those who copy successful startups will die and many others would fall by the wayside. Top 10-20 per cent (of the startups) will rise and become major companies”, he said.

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