Indian e-commerce firms have stopped leasing out the office space across India because of cost cutting measures and slowdown in funding. Office space rented out by ecommerce firms have collapsed down by 78% while first half of 2016 according to a latest report.
Previous year in the first six months, 4.2 million sq. feet of office space was rented by these firms from prime 6 Indian cities which are Delhi-NCR, Mumbai, Pune, Bengaluru, Hyderabad and Chennai. However, later it reduced to 0.9 million sq. feet which is a reduction of 78%.
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The major impact in real estate by e-commerce was seen in Bengaluru where the reduction was as big as 95%. In terms of office space rental by these firms, a total of 4 transactions were materialized which carried by Makemytrip and Redbus.
Comparatively, previous year, Flipkart and Amazon leased out 3.2 million sq feet of office space combined, except from booking.com, Tinyowl and Groupon pitching in with huge deals. There was less reduction faced by Delhi-NCR region as compared to other cities as office spaces rented out by e-commerce industries dropped down to 3.5 million sq feet from 3.7 million sq. feet respectively.
All across India, office space lease out increased by 12% to 20 million sq. feet from 17.9 million in the last year. Viral Desai said that e-commerce segment had a share of 30% in overall office space absorption during 2015. But their share has been dropped significantly in the first six months of 2016. The growing pace of e-commerce players is becoming more challenging.
Comparatively, previous year, Flipkart and Amazon leased out 3.2 million sq feet of office space combined, except from booking.com, Tinyowl and Groupon pitching in with huge deals. There was less reduction faced by Delhi-NCR region as compared to other cities as office spaces rented out by e-commerce industries dropped down to 3.5 million sq feet from 3.7 million sq. feet respectively.
All across India, office space lease out increased by 12% to 20 million sq. feet from 17.9 million in the last year. Viral Desai said that e-commerce segment had a share of 30% in overall office space absorption during 2015. But their share has been dropped significantly in the first six months of 2016. The growing pace of e-commerce players is becoming more challenging.
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Meanwhile, Paytm founder Vijay Shekhar Sharma hinted at massive unification in Indian ecommerce space, as according to him, 2 major players i.e. Amazon and Paytm will remain in the market within coming 6-9 months.
He says that e-commerce business as well as its market is reaching the maturity of the players. In coming months, the key contenders of this business will get revealed. In order to fight with Amazon, a strategic player is needed and which is why it makes sense for people to align with Alibaba v/s a lot of others.
Apart from this, he also informed that Paytm’s new E-commerce unit is going to be there anytime soon till Diwali this year. They will make separate marketplace and then raise funds which means looking up to acquiring correct optimum sized companies to become big.
He says that e-commerce business as well as its market is reaching the maturity of the players. In coming months, the key contenders of this business will get revealed. In order to fight with Amazon, a strategic player is needed and which is why it makes sense for people to align with Alibaba v/s a lot of others.
Apart from this, he also informed that Paytm’s new E-commerce unit is going to be there anytime soon till Diwali this year. They will make separate marketplace and then raise funds which means looking up to acquiring correct optimum sized companies to become big.
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Paytm’s only aim is converging on their payment bank apart from expansion of user base of their mobile wallet. Talking about unification, there is a possibility that Flipkart and Paytm can combine their efforts to fight the might of Amazon in the near future. The concept became stronger after Flipkart started delivering the orders of Paytm through their dedicated logistics branch Ekart.
Is Paytm and Flipkart going to merge this coming diwali to create a new e-commerce entity? We will soon find out.
Is Paytm and Flipkart going to merge this coming diwali to create a new e-commerce entity? We will soon find out.
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