Over the last few days, over multiple conversations, I've heard rumors about significant layoffs in e-commerce in India, and e-commerce companies being shopped around. Funding has dried up, and because businesses are not yet profitable, there is "consolidation" in e-commerce in India, with investors pushing for businesses to combine operations, with the idea of cutting costs and combining user base, and mostly with the objective of weathering the storm that hit Indian e-commerce after the Indian government announced that it was allowing foreign direct investment in multi-brand retail, but not allowing any investment in e-commerce. This has forced businesses to change business models in India - from direct-to-consumer retail to a marketplace model (since marketplaces are allowed under the current FDI norms). Many e-commerce businesses have shut shop. I'm hearing of large e-commerce companies that have two to six months of capital left, and while it might be good that speculative e-commerce ventures that were created just to be sold might not make it, there is a worry that even large ventures which are highly leveraged will have to take certain decisions for lack of capital. As K. Vaitheeswaran, Founder of IndiaPlaza, and someone who has spent around 12 years (maybe more) building an e-commerce business, told MediaNama a couple of days ago, even marketplaces are collateral damage, because investors are spooked: Even though we have a model which is above board, we are struggling to convince investors because many investors are saying that they want to see how the investigations…
