Flipkart, Snapdeal see falling sales despite rise in internet users


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Online retail sales in India have been sluggish so far this year and start-ups across the board are struggling to make money from ads, content and sales of products and services, raising concerns whether Internet companies can attract enough new paying users to support the rosy projections of investors who have pumped billions of dollars into them.

According to a report on Thursday by Kleiner Perkins Caufield Byers, a Silicon Valley venture capital firm, the number of Internet users in India grew by 40% in 2015 to 277 million.

While the number of Internet users is growing rapidly, that of those transacting (or online shoppers) isn’t increasing at the same rate, start-up executives and investors said. The large Internet base in India looks attractive but making money from users is another matter altogether, they said.

For the first time in years, online retail sales in April were at a lower level than December of the preceding year, according to executives at top e-commerce firms. Gross e-commerce sales including discounts were at an annualized $15 billion in December, according to research and consultancy firm RedSeer Consulting.

Internet companies concerned about not attracting enough new paying users to support the projections of investors who have pumped billions of dollars into them. Seems that the steady rise of internet users didn't brought enough people interested in actually purchasing stuff promoted by ads.

I think they need to give it time, I believe most indian people that became recently internet users can't afford to do the kind of internet shopping these companies are looking for.


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