India's e-retailers jostle for market share with an eye on Alibaba's future move

THERE is a churning going on in the e-commerce space in India. The government announced recently a change in public procurement through e-commerce with the help of a software it developed, that would allow government departments to order online. The software would bring transparency, ease, efficiency and time-bound payment into the purchase process.

Meanwhile, India's largest e-retailers in the market, Flipkart and Snapdeal, are jostling for market share among themselves and e-commerce giant Amazon while the elephant in the room is Chinese giant Alibaba, poised to enter the Indian market. A lot more is on the cards. The three top guns of Indian business - the Ambanis, the Tatas and the Aditya Birla group - are planning to tweak their retail operations to enter the e-commerce space, while the biggest brick-and-mortar retailer, Future Group, has announced it will stick to the traditional way of selling and not go online.

Initially helped by easily available money and heady valuations, the big players burnt a lot of money running after market share and selling at heavy discounts to grab customers. Now with many companies having to sell out as losses mounted, the business model is changing. In the initial days, e-commerce players eyed higher traffic through deep discounts; they have now started to think about profit margins for long-term growth.