Future of E-Commerce in India Looks like an All-American Affair
The technology industry in India seems like as if it is bracing itself for the next era of warfare in e-commerce. The warfare looks more like its being waged by two well-known and big brands in the world in the field of e-commerce – Walmart and Amazon.
While Amazon has already set its foot firm in the country pledging to invest more than $5 billion to grow its business, another US giant, Walmart, is inching closer day by day in its deal to buy the Indian e-commerce giant Flipkart.
According to a recent report by Bloomberg, Walmart is on the verge of acquiring anything between 60 and 80 percent of Flipkart for a whopping $12 billion. If everything goes well, the deal will potentially increase the value of Flipkart to as much as $20 billion – A major jump, analysts say, from its $12 billion value which the Indian e-commerce giant secured with the $1.4 billion investment from Microsoft, eBay and Tencent.
Amazon also tried to conduct last-minute talks with Flipkart but chances are high for Walmart to making a deal while putting the founders of Flipkart on favour. The report by Bloomberg also cautioned that it is very too early to celebrate as there are still some issues to be solved like which shareholders will sell and how much of selling will they and whether the leadership of Flipkart will remain even after the deal. On top of all this, there’s still no guarantee that any of these talks will be fruitful after all.
It is also reported that Tiger Global, which holds a 20 percent share and SoftBank, which has 20 plus percent will be offloading their holdings into the company. As more people from the 1.4 billion population of India are turning towards the Internet, the growing online market seems to be at stake with the recent investments.
Reports claim that India will have more than 500 million internet users by the end of 2018 – up from 481 million six months earlier – which is considered to have a major impact on the e-commerce market. However, analysts suggest that this change will become a huge gaining factor for online retailers and the Indian e-commerce market will be at $200 billion by the end of 2026.
Walmart is focusing more on the Indian market after its exit from Chinese market in 2016 which happened with its selling of Yohaodian service to JD.com which is rival to Alibaba. After the deal, Walmart used JD.com as a storefront to reach customers in the Chinese market.