I just saw this piece on the Indian e-commerce industry by an Economist blogger from a few months ago. Plenty of positive news but also:
Revenue models look shaky. To secure repeat business, most portals offer incredibly low prices, payment by cash on delivery and, nearly always, free shipping. Consumers love it but companies are scratching around for ways to shed the operational burden. Ironically, the very things that have propelled e-commerce in India could lead to its downfall.
It's not just cash on delivery. An investor in a large Indian e-commerce company told me last week about some customers demanding almost unbelievably that they be allowed to pay by credit card on delivery -- stretching working capital requirements even further!
What's interesting is that the mood in India seems to have become more polarised since this piece was penned. I encounter still-fervent believers and equally pessimistic naysayers, and not that many "in-betweeners". The believers tend to be entrepreneurs, of course :-) but also some investors and other observers. I am starting to sense that the momentum is shifting to the pessimists now. End of another wave in Indian investments?