So.. a little bird told me about what’s happening in Indian e-commerce companies.
While they are experiencing significant revenue growth, their corrupt employees are experiencing wind fall gains from corrupt practices.
Purchase managers at Myntra, snapdeal, Be Stylish and Fashion and U are taking kickbacks between 4-10% of the revenue given to each vendor. This is enough money that a lot of these purchase managers have left these companies and created there own entities. So.. a purchase manager responsible for a 10cr /year ($4M) category can take between 40Lacs to 1 crores a year from these kickbacks. This is easily between 5-20 times their yearly wages. So.. no surprises that it works the way it does.
Of course ,this will not surprise any body brought up in India. Bit is does shed light on lack of controls at these companies as they chase between 30-100% growth year on year. Some ungodly big numbers have been mentioned here. Clearly there is a lot of money to be made on and off the books.
Lets look at the reported revenue growth being experienced by these companies. Please treat these numbers as ballpark estimates made by reading various news articles by me.
More information on these companies valuations can be found in this economic times article