E-commerce poster boy Flipkart left the market in a tizzy last month, after it raised $1 billion (over R6,000 crore) in fresh funding from investors. One of the largest investments so far in the competitive online shopping segment in the country, with this fresh infusion of funds, Flipkart is valued at about $7 billion (around R42,000 crore). “Our investors recognise that e-commerce is a long-term game and are aligned to our plans and have complete faith in our abilities,” said Sachin Bansal, co-founder and CEO, Flipkart.com.
And even as the dust was yet
to settle, came the news that Amazon, the world’s largest e-commerce company, was investing
$2 billion in the Indian market.
In a statement released by the
company, Jeff Bezos, chief executive officer, Amazon said, “With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India. At
current scale and growth rate,
India is on track to be our fastest country ever to a billion dollars in gross sales.”
With the two e-commerce biggies declaring war, analysts believe that at the end of the day it’s a win-win situation for all. According to a recent study by Technopak, a management consulting firm, the Indian e-tailing market which is currently pegged at $2.3 billion is expected to reach $32 billion
by 2020. “These are good times
for the e-tailing business in India. The promise of total investment
of $3 billion proves that e-commerce has acquired serious overtones in the country. This kind of investment will not only help the e-tailing business to grow, even the retail business will benefit from it in the long run,” said Ankur Bisen, senior vice-president, retail and consumer products division at Technopak.
Niche players too have nothing to complain about. According to Supam Maheshwari, CEO, Firstcry.com, while the announcement is definitely about the show of might ultimately everyone is
expected to reap the benefits.
“Both the players will work towards further establishing the
category. This will also help in gaining consumer trust and more and more consumers will join the e-commerce frenzy,” he added. Firstcry.com which sells baby products online also has a
chain of retail stores across the country. The e-commerce player plans to increase the number of its stores from 70 to 100 by December this year.
Agrees Ashvin Vellody, partner, management consulting, KPMG in India, who says that for both Flipkart