Cooling-off

At the beginning of this decade, Snapdeal was touted to be the next big thing. How co-founder Kunal Bahl pivoted the business from discount coupons to an e-commerce marketplace was the talk of the town. Having the zeal within, keeping one’s ear to the ground and being flexible enough to pivot the business model are the hallmarks of a great entrepreneur, and Bahl demonstrated that to perfection. Unfortunately, post an aggressive growth phase, Snapdeal’s dream run is slowly turning into a nightmare. 

While executive editor V Keshavdev in this issue’s cover story drills down what exactly went wrong, the Snapdeal saga reaffirms two key facets. First, the vulnerability of e-commerce players in a market such as India. Snapdeal was next in line in terms of online retail presence, but is finding it hard to survive. And the leader among Indian e-commerce companies, Flipkart, which has been around for a while, is also fighting Amazon to stay relevant. A deep-pocketed strategic investor such as Walmart coming in may help it carry on with the cash burn much longer but taking on a tech giant which has perfected the business is no easy task. 

Technology, as is increasingly becoming evident, is a winner takes it all game. So, the best case, for others in line is to sell out to the leader at some point. The question is when, and at what price, and ever more, what if the adequately-funded leader decides not to consolidate? Second, in venture-backed firms, where the bet is placed predominantly on an entrepreneur, there is a great danger of the founder cashing out quickly. Yes, venture capitalists can bring in a new management team but then don’t we all know that a CEO can never replace an entrepreneur, for what the latter brings to the table is not just skill-set but hunger and passion that create disproportionate value. 

In other stories, we have a feature on public sector bank stocks. They are going through pain but should it be looked upon as an opportunity to buy? Another interesting feature is about how L’Oréal is leveraging the digital platform to grow its business in the country.