Shrugging off bad memories of the dotcom bust of the late 1990s, several mid-level professionals are lining up to join niche and online retail start-ups.
Online retailers say mid-level managers no longer feel insecure making such a move as they do not see e-retailing as a risky business.
“Between 2010-12, the CAGR (compounded annual growth rate) for e-retailers has been about 40 per cent, leading to more jobs as well as better salaries because of competition,” CEO of
E-retailers like
Net base expansion
Mehrotra and other such e-retailers point out that the boom in e-retailing companies has been fuelled by the expanding Internet user base in India.
According to an Assocham study, India is one of the fastest growing markets among BRIC countries, adding over 18 million Internet users a year and growing at an annual rate of 41 per cent. At present, there are about 120 million Net users in the country.
Saboo says that some of the companies are wooing mid-level professionals by offering them a stake in their entities.
Ownership
“It gives a sense of ownership to those whose secret desire was to become entrepreneurs but did not want to venture out on their own,” says Saboo.
But not all get stakes and those who don’t often get salary hikes of up to 40-45 per cent when they join the start-ups, says Saboo, whose e-company offers discounted food vouchers usable at various restaurants.
He says that when his portal opened in July 2012, the number of deals on offer was about 150 a day. Within a year, this has gone up to 700 deals on offer every day.
But there is a downside to the boom as well. As the teams are generally small and the e-retailers run a tight ship, they expect employees to multi-task. For example, a marketing person will have to double as a sales executive too.
Mohit Taneja, co-founder of ebagsfull.com , a multi-format e-commerce portal, sounds a note of caution. According to him, the entry barriers to launching e-retailing companies are extremely low.
“There are several third-party software products which supply readymade e-commerce platforms on a turnkey basis,” points out Taneja.
Therefore, not many do enough homework before launching e-portals. Hence, some of them either fold up soon or get gobbled up by bigger players.
Consolidation
In such an environment, mid-level managers may be taking too much of a risk by leaving safer brick-and-mortar companies.
He says while 2011-12 was a boom year for the e-commerce industry, the next fiscal could see consolidation as well as M&A activities. “When these things happen, the companies get right-sized, leading to loss of jobs,” says Taneja.