Risks to E-Commerce Companies
Risks to E-Commerce Companies E-commerce has been expanding rapidly in India at an unprecedented rate due to multiple reasons. With this fast growth, many of them are vulnerable to several types of risks, which can be categorized broadly into: 1. Financial Risk a. Profitability/ Business viability/ Sustainable business model: Many of the e-commerce start-ups have either shut down their operations or finding difficult to sustain in the market due to their models of heavy discounts, bombarding customers with unsustainably priced products, etc. They are bleeding and running with several rounds of funding with the hope that one day they would be able to make money. Many of the critical financial ratios would be negative for several e-commerce companies and long-term sustainability itself is a big question-mark. b. Credit Risk: Many purchases of high-end products by cus...