“There is no bubble in The e-commerce space”

The word bubble is cropping up in the industry only because many companies are yet to find a way to profitability, feels Prabhakar Sunder, CFO, Voonik.

In an interview to CFO India, Prabhakar Sunder, CFO, Voonik, discusses the challenges and the outlook of the e-commerce industry in India. Below edited excerpts from our chat:

What are your views on where the e-commerce industry is headed today?

There is a huge potential for the e-commerce industry to grow. All talks of the so-called bubble are very shallow. Any new industry needs time to develop and mature. Ebb and flow is part of any journey and every successful company tides through these phases. That’s the way Amazon grew into a global giant.

Both Amazon and Alibaba are highly interested in India. Both are targeting to make India their second biggest markets. I think the word bubble is cropping up in the e-commerce because there are multiple companies operating in this space which are yet to find a path to profitability. Among the big players, the current emphasis is on penetrating the market at a rapid pace, which is the reason for the high level of spends leaving the P&L looking bad in terms of bottom line.

About two years ago, the country witnessed the entire private equity space getting excited over the e-commerce industry, and pumping huge funds into Flipkart, Snapdeal and other e-commerce players. But today the same investor community has gone a little slow. What do you think could be the issue?