Startup culture has seen a boom in the last few years. By the year 2025, the business under this is estimated to increase to more than 974 million. Today startups trend is gaining momentum in every small and big city. In such a situation, it is very important to know whether these startups are really profitable or this too is just an imaginary bubble created by the market.
What is the reason for the startup trend
There was a time when e-commerce startups in India had to face many challenges. People were reluctant to try or consume their products/services, a major reason for which was lack of information. Whereas, today the situation has changed. Today’s customer is an informed consumer who can be reached through various channels. It has become easier for businesses to build consumer confidence. Great services and deals are attracting people as well as driving growth in domestic markets.
IT boom brings talent pool
There is no dearth of talent in India. Indian startup especially in e-commerce cannot be imagined without the required human resources. A large number of youth are opting for the field of IT which is increasing the trained manpower.
Availability of good funding
Growing startups in India credit big It goes to the investors who have come forward in number, who are promoting them by taking the risk and also helping them to move forward. Along with this, pro-government policies Like ‘Startup India’, ‘Make in India’, ‘Digital India’, ‘Self-reliant India’ etc. are encouraging people associated with e-commerce business.
It would not be wrong to say that in India The e-commerce startup ecosystem is not only growing in a big way but is also maturing with time. While the industry was monopolized by cities like Bangalore and NCR till a few years back, now even smaller cities like Pune and Jaipur have made a mark with the recent emergence of e-commerce startups in India.
India ranks 57th in the Global Innovation Index. This sector was earlier dominated by ventures but now in India There has been an increase in the number of startups. It is not surprising, then, that in the last 4 years about US $ 35 billion has come to the country.
3 Big Expectations Related to Startups p>
- Increased investor confidence has resulted in increased investment for startups in India.
- Improving technological progress.
- In order to encourage startup wave in India Schemes being run by the government.
E-commerce marketplace in India has been trying for four decades to develop the startup ecosystem. India has the world’s fastest growing e-commerce startup market. Behind which are investors and young talent associated with the IT sector.
Are startups making profits?
Also It is a fact that where India is a startup market, it is also proving to be a graveyard for many new efforts. Many startups are also becoming a deal of loss. Startup omnichannel eyewear retailer Lenskart has been in the news for more than two years now. Year 2022 to Lenskart incurred a loss of Rs 102.3 crore. Whereas in the financial year 2021, it had a net profit of about Rs 29 crore. However, this loss can also be linked to the Kovid-19 pandemic, in which many sectors have suffered losses.
According to a report related to the Ministry of Corporate Affairs, Lenskart Ltd. Year-on-year growth has been recorded at the rate of 66 percent. But the year 2022 The total expenditure of the company increased by 72.8% to about Rs 1,726 crore in 2015 from Rs 999 crore earlier.
The company spent about Rs 234.6 crore on advertising and promotion ie its marketing. Along with this, the expenditure on employees also increased by about 53% to Rs 245 crore in March 2022. Whereas, the total loss of Sugar Cosmetics in India in the financial year 2021 was 210 million. Since FY 2019 Loss of this startup went on increasing. These fast-starting companies are slowly moving towards losses.
The truth behind the IPO hype
When a private The company sells shares to the public. With this, the business and ownership of the company reaches the public. There could be shares being sold or debt. Being listed on a stock exchange gives the company access to a larger investment pool, making it easier for shareholders to withdraw money. Companies may choose to IPO while making a profit, and many people want to buy its shares, in which case the companies are able to make much more profit.
Generally, an entrepreneurial business To start with investment from angel investors and their own savings uses money. As the business grows, it starts making money, venture capitalists and private equity firms try to buy the business. But if the owner of the startup takes the risk If the business wants to expand and earn more money, then it can be possible through (IPO). This process allows trading and ownership with the permission to sell shares of the company. This is also the purpose of these private firms because in this way they can earn more profit than the cost.
