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New Delhi: The ability of businesses to innovate and execute will determine their success in the e-commerce era.

Experts at a panel discussion organized by the Confederation of Indian Industry (CII) and Singapore Management University backed this view as India attracted investments of more than $4 billion in 2014 in the e-commerce industry, led by online marketplaces such as Flipkart and Snapdeal.

Execution by a company will be a key determinant of its success in the highly competitive e-commerce space, said Manoj Kohli, managing director, Bharti Enterprises.

Spotting fast changing customer behaviour, he said, was the other critical piece to a business’s sustainability. “Consumer behaviour is changing faster than the industry can see."

On the high valuations of e-commerce start-ups, Sanjeev Aggarwal, senior managing director, Helion Ventures Pvt. Ltd, said that while the potential of greater Internet penetration has driven investor interest in the e-commerce space, the quality of execution by companies will determine their survival.

“There is a lot of focus on customer-centricity, which is fundamental to building a great company," said Aggarwal.

Arvind Singhal, chairman and managing director, Technopak, sounded a note of caution about what he called “incredible start-up activity".

Singhal said that there was lack of innovation and differentiated business models that could lead to value erosion.

“There are a lot of ‘me-toos’ who could end up destroying values not only for themselves but also for somebody else because if lowest price is the only differentiating factor and there is no real innovation," he said.

“Valuation might be there, but even if they were to execute well, if there are 10 other players in the same space doing exactly the same thing no matter how smart you are executing, lowest price wins and investors lose," he said. India is home to nearly 3,000 start-ups, and the pace at which new businesses are being started has accelerated.

Experts also observed that digital penetration and the growth of e-commerce and the consequent change in customer behaviour has seen market consumer product leaders struggle to cope with the new kind of customer.

“You not only have to be a risk taker but you have to innovate at every step of your business cycle because this customer is changing. It is a moving target because of penetration of phones, of digital communication. The customer aspirations are moving ahead of time," said Singhal.

Indian entrepreneurs’ do not lack the ability to innovate and they should focus on executing their ideas, said Arnoud De Meyer, president, Singapore Management University.

“In most other countries I would say you have to stimulate creativity. However, I think there is an overabundance of creativity in India in getting practical solutions, but I think total commitment to quality and execution once you have that creative idea is absolutely essential for managing innovation," he said.

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