The Metric That Indian Startups Once Swore By Is Now Being Blamed For All The Sector’s Ills

Till a few years ago, profitability received the step-child treatment from Indian e-commerce entrepreneurs.

“While startups did extremely well by using their public relations muscle to ensure that GMV becomes the industry’s darling, it’s no more than a cover up for numbers that aren’t good enough to be reported and may well point to the lack of a sustainable business model. GMV as a metric should never have been reported because it conveys absolutely nothing. It is absolutely flawed,” said Sanchit Vir Gogia, Chief Analyst and CEO at research and advisory firm Greyhound Research.

“Let’s keep our expectations real,” Gogia of Greyhound said. “Profits have been a part of internal discussions at several Indian startups for some time now. But they can’t talk about it externally because they hardly have anything to show. I don’t think that’s going to change in the near future.”

“When the profits for companies like Infosys move even 3-5%, they face so much scrutiny. You think startups in the country have the appetite to face that kind of a close watch?”

[Quartz]

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