Amazon started as online book store and has grown to be the worlds largest online retailer.
Walmart and Amazon race to invest in India’s Flipkart
Marketplaces are turning to India as the biggest emerging territory in the world and for two that means looking to Flipkart as the Indian market leader.
Amazon are now Flipkart’s biggest competitor in India having hitherto been unconcerned by eBay‘s operations until in 2017 they swallowed up eBay India which is now part of the group although still operating as an independent entity. In return eBay holds an equity stake in Flipkart.
Now it would appear that Flipkart itself could be the subject of a takeover with both Walmart and Amazon showing interest. Having despatched eBay, Amazon are a serious contended taking marketshare from Flipkart which itself was founded by two ex-Amazon employees. It doesn’t look likely that Amazon will win the race to partner with Flipkart however with Walmart looking the most likely contender.
Walmart as the largest retailer in the world are relatively small in marketplace terms and it would appear they’ve been deterred from entering India due to the country’s foreign direct investment policy. Investing in India would pit Walmart directly against Amazon as well as bringing their retailer experience to help compete both online and offline against Amazon.
If Amazon, the less likely suitor, were to win Flipkart’s hand it would make the combined businesses unassailable in India with a mammoth market share. Amazon are already investing up to $5 billion in their Indian operations and are committed to the country.
The real attraction of India is the sheer size of the population and their combined spending power. Driven by the healthy economic growth, increasing internet and mobile penetration, and rising personal disposable income of Indian consumers, online sales in India are expected grow further at a compound annual growth rate of more than 35% by 2020.
With eBay India already owned by Flipkart, it’s possible that part of eBay could soon be owned (at least in part) by Walmart or Amazon. That would be an unexpected development.