Flipkart had a golden opportunity to practically take over the e-commerce market in India. But they (like most other Indian companies) aren't/not willing to expand enough.
Could you expand on this?
India is definitely poised to become a booming e-commerce market in the future but it has no where near peaked for these companies to be content with. The consumer market is still heavily dominated by the US and European countries. If they do not expand they are doomed.
And this is not restricted to e-commerce players alone. I notice this even with payment gateways / payment processors. We have quite a lot of payment processors that have a strong local presence. Some are even as good as Stripe (see Razorpay) when it comes to API and ease of implementation. But then again, they have no ambitions to expand to other countries. So India essentially has no access to an International payment gateway (Paypal doesn't count as it's only used for remittances. There is no equivalent of Paypal IPN/Paypal Express Checkout/Paypal Marketplace). To disrupt these companies, all it takes is for Stripe to open shop in India. Nobody would then have any incentive to use these payment gateways and they'll start seeing their market share diminish.
Somehow the rather unfounded assumption was say they serve 50 million customers today and Indian population was 1.25 billion so there is opportunity to grow 10-20 times. The simple fact is 50 million might be close to maximum market size as remaining population simply do not have that kind of incomes to sustain e-commerce companies peddling frivolities. I say frivolities because if I am earning USD 5K/year equivalent in India I am in top 1.5-2% Indians. By Indian government tax data less than 3% people file income tax returns in India and remember those all who file returns does not necessarily means they pay income tax.
There is of course no reason for Flipkart/snapdeal founders to admit basic facts as their companies made them fabulously rich.
India is definitely poised to become a booming e-commerce market but it has no where near peaked for Flipkart/Snapdeal to be content with. They just cannot depend on the Indian marketplace alone. Just because we are 1.25 billion strong and will probably adopt cashless means does not automatically make us a market for Flipkart/Snapdeal. They have to compete to get the marketshare. The market is dictated by one who is not just innovative but also caters to all sections of the diverse society. Sadly, only Amazon is able to currently provide a complete experience even though it's a late entry into the Indian marketplace. Flipkart/Snapdeal is already losing a major portion of their marketshare to Amazon and that decline is going to continue unless they expand and compete directly with Amazon in their own turf. Innovation alone cannot sustain Flipkart/Snapdeal.
The consumer market is still heavily dominated by the US and European countries. If they do not expand they are doomed. They do not have enough cash to compete with the likes of Amazon/Ebay who have a better inventory and provide access to the global marketplace.
Got a citation for that?
> They are just deviating even farther from their goal: delivering goods.
I thought the goal of any business was to make money. IMHO, since cash is such a sought after good in India at the moment, this is a clever way to monetize the cash they get from their Cash on Delivery service. It saves them the logistics of depositing large amounts of cash, while making more money.