'Vertical and B2B e-commerce will excite investors in 2018'

The year 2017 is almost on verge of paving a way to 2018 after witnessing many ups and downs in the e-commerce industry. And like this year, the next one will be exciting and expected to bring new opportunities for new startups.

"Vertical and B2B e-commerce will be two big areas that investors will find exciting. Investors are eagerly looking to fund solutions for the first-time internet/smartphone user in India, in security solutions firms and companies that have unique distribution hacks, as e-commerce products will be undifferentiated, but distribution can be a differentiator," said Sanjay Swamy, Managing Partner at Prime Venture Partners, an early-stage investment firm, said to BusinessLine in an interview.

Talking about the outlook for the e-commerce industry in 2018, "I expect entrepreneurs to jump in and address several unsolved problems in India. Several ‘newnicorns’ will be born in the next 12-24 months, many of which will be formed by (future) alumni of first-generation e-commerce companies such as Flipkart, Snapdeal and ShopClues," added Swamy.

The advent of several overseas players and an appetite for later-stage rounds. This bodes well for early-stage investors who now have the confidence that companies which go through early pains and establish a product-market fit and unit economics.

"Several ‘newnicorns’ will be born in the next 12-24 months, many of which will be formed by (future) alumni of first-generation e-commerce companies such as Flipkart, Snapdeal and ShopClues," added Swamy. However, the good firms will not die of starvation, he added.

This year many big players such as Flipkart, Paytm and AMazon consolidated their position and raised investments. The year also witnessed the adoption of the mobile internet, mass adoption of digital payments and faster access to credit.

E-commerce future

The e-commerce market in India is poised to grow at a 30 percent compound annual growth rate for gross merchandise value and will be worth $200 billion by 2026, according to investment bank Morgan Stanley.

India had 60 million online shoppers in 2016, which is 14 percent of the internet user base in the country. This will rise to over 50 percent by 2026.

However, from Jan 1 all e-commerce firms in the country will have to be transparent while selling their packaged products, according to the government ruling.