Indian e-commerce players need to think how long they can continue with their “deep discounting models” and instead these startups should focus on better customer experience and satisfaction to excel and survive, SoftBank President Nikesh Arora said.
The Chief Operating Officer of the Japan-based telecom and Internet giant said that 2015 witnessed huge funding going into start-ups, but it also saw firms being wiped out.
He was speaking at the Startup India event.
“So now in 2016 you have to sit down and say are these deep discounting models required to continue or is it time for people in this business to start differentiating and start trying to compete on the quality of services to the end consumer.
“Let the consumer decide who they want to make the leader as opposed to keep trying to buy it as good consumer. So our message to all our companies is please focus on execution, please focus on giving a great customer experience and let the customer decide,” Arora said.
On the outlook for Indian e-commerce market, the former Chief Business officer of tech giant Google said: “In many of these sectors, I have seen that there is room for more than one player in the market, so hopefully our investee companies and other companies in the same sector would listen to the advice.”
SoftBank has invested in online marketplace Snapdeal and taxi haling app Ola.
Arora said 2015 saw “tremendous” amounts of funding going to a lot of companies.
“But also what it did was that it created a shake-out in lot of the sectors in the market. eCommerce sector has gone from 500 plus companies to probably 10. The ride hailing services have perhaps gone down to two companies,” he added.
On a question whether there will still be an appetite for funding in the future, he said earlier due to the low risk profile of the world money was easy to access, people were been willing to give money much quicker to start ups and much quicker to new ideas.
“…we have seen that a higher degree of risk has come into the market so there is little bit of caution. I think all that does is it makes it a little bit harder to raise money if you don’t have a good idea.
“All that will happen is that great companies will continue to get funded, lot of not-so-great companies will get weeded out. I expect to continue to see funding happening and a market to be there for great ideas,” he said.
Arora said that start-ups need to think on the lines that what are they creating for the end-users, how will it change their lives and how will it make it better in order to assure their funding.
He further said: “If you find a problem and solve it, then you and I as a consumer will find nothing better. If you are doing really well, solving a lot of people’s problems, you will have no trouble finding the money.
“People will find you and give you the money. Focus on solving customer problems… The message which I have given is that find the problem for the consumer, find an amazing way to solve it and have them turn around and say wow.”
On investment in solar energy space in India, Arora said: “I think it has to do with the vision that Masa (SoftBank Founder Masayoshi Son) had. He decided to focus on clean forms of energy in Japan and I think by extension we started in India. India has a huge opportunity to leapfrog the existing not clean ways of producing energy.”
Besides, India is blessed with a lot of sunlight and with a tremendous amount of reshaping of the energy sector in India, SoftBank thought it was a good time to invest in the country, he explained.