Payment, logistics, technology and supply chain are no longer the backroom boys, as leading e-commerce companies are planning to spend big bucks in these areas. High-pitched M&A (mergers and acquisitions) activity is also expected in the coming weeks and months in this space.
The latest is Snapdeal wanting to invest Rs 350 crore on the supply-chain side this year, just a few days after Flipkart said it was looking for opportunity to acquire assets in the area.
Snapdeal's supply chain investments would also include setting up of fulfilment centres across 30-35 cities. "We are actively in talks with start-ups who are coming up with innovative technological products in logistics, payments, seller experience etc.," said Kunal Bahl, CEO & Co-founder, Snapdeal.
Smaller players such as Shopclues are also focusing on similar areas. "We are in talks to work with start-ups who can bring in innovation to these areas," said Sanjay Sethi, CEO & Co-founder Shopclues.com.
Consolidation within the payments industry is also in the pipeline. Key players in the payments industry like Oxigen-which is a joint venture with Johannesburg based Blue Label telecom is gearing to join hands with international players present in India in payments sector. "We will team up with key players in equity partnership in the payments sector," said Pramod Saxena, Founder and Managing Director, Oxigen Services India.
"We can't develop everything on our own. We need to be flexible in approach for technological innovation and growth,"said Bahl from Snapdeal. With over 50 per cent of the overall orders being cash-on-delivery and double digit rate of returns, reverse logistics is another key challenge and sector for acquisition.
Areas like reverse logistics works in an entirely different area of expertise and it's not the core area of competence for e-commerce companies, said Hitendra Chaturvedi, Founder & CEO of Greendust-one of the leading players in the category.
Experts say that start-ups that have mushroomed in reverse logistics would need to join hands with more established players as the business needs deep pockets for scaling up.