Prof. Venkataramanan Krishnamurthy, in a highly interactive session with the students of TAPMI spoke about two major topics, the e-commerce market and the technological aspects of the retail market in India.
He started the session by stating the importance of e-commerce in present times and how it affects sectors that do not deal with the e-commerce market. He went on to explain that e-commerce has great growth potentials, though most companies today are running into losses. This is because investors focus more on the future potential of a company than its present financial state. Flipkart was cited as an example. Investors continue to invest in the company owing to its future potential and that is the reason the company can sustain losses of about 30 percent.
Moving ahead, he presented an interesting comparison of the retail and e-commerce markets by taking examples of Walmart and Amazon, the world leaders in retail and e-commerce respectively. In the year 2014, Amazon’s revenue was $88 billion, while that of Walmart was $486 billion. The 20 years cumulative sales figures of Amazon was valued at $408,941 billion which is less than Walmart’s sales figures of one year. The same holds true for profit figures too. However, in 2014, Amazon overtook Walmart in its market capitalization value. This goes on to show the enormous potential of the e-commerce market.
A major focus area of the talk was about technological advances in the international retail market. A video of the Carrefour warehouse at Vert-Saint-Denis, France was played as an example of the highly functional, synchronized and efficient warehouses. Warehouses in international markets are centralized, serving a large geographical area while those in India are localized. Inefficient transport system and the complex tax structure were cited as hindrances to technological advancement of the retail market in India. He ended with a note that the introduction of the GST bill would pave the way for a more efficient retail market in the country.