E-commerce cash-burn may shrink by 67% in 5 years

A significant shift in unit economics is on the cards for the country’s e-commerce sector on the back of an expanding catalogue of products sold through the internet.
A recent study by management consulting firm RedSeer says that cash-burn in the e-tailing sector is expected to shrink to “one-third of its current rate” by 2023, driven by changes in product category mix, among other reasons.
“E-tailing as a sector lost $15 for every $100 of GMV (gross merchandise value) in 2018. We expect this to shrink to $12 in 2019 and $5 in 2023,” RedSeer’s recent note said.
The report expects a fall in the share of mobiles and electronics — a category that fuelled the e-commerce boom — in coming years, and a rise in shares of higher-margin fashion and home need products. The discounts offered by the sector will also likely fall, the report said.