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Intense fight ahead in Indian e-commerce space

Author: Debasis Mohapatra/Wednesday, March 14, 2018/Categories: FMCG & Retail

Intense fight ahead in Indian e-commerce space

Mumbai, March 14: Indian e-commerce space is likely to see intense fight in the coming quarters as two major players — Flipkart and Amazon — are all set to raise further funds in their bids to grab higher market share.

According to reports, global retail giant Walmart is planning to become largest shareholder of domestic e-tailer Flipkart. If the deal goes through, this will pitch Walmart directly against Amazon. The US-based brick and mortar retailer is planning to ramp up its market share in Indian retail industry, which is growing at a healthy rate of around 20% in recent years.

“If the deal materialises, it will give a boost to Flipkart’s warchest and provide further leverage to take on the competition from Amazon,” an analyst said.

Notably, Flipkart raised close to $4 billion in funding during last year from various investors. The fresh round of funding is likely to be in the range of around $2 billion from Walmart, reports suggested.

Walmart’s plans to take majority stake in Flipkart have come at a time when Amazon is taking an aggressive approach to push its market share in Indian market.

Amazon has pumped in funds worth ₹5,289 crore in 2015, ₹5,340 crore in 2016 and ₹6,200 crore during the last year. The Seattle-based company started the new year with capital infusion of Rs 1,950 crore in its Indian unit. Jeff Bezos, the promoter of Amazon, has committed to invest $5 billion in the Indian business.

Apart from Flipkart and Amazon, Chinese e-tailer Alibaba has invested in Paytm mall, promoted by payment digital platform, Paytm.

According to a Morgan Stanley report, India’s e-commerce market will grow at a CAGR of 30% to touch $200 billion by 2026. “India had 60 million online shoppers in 2016, which is 14% of the internet user base of the country. This will rise to over 50% by 2026,” the report said.

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