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Indian e-commerce alliances to fight against Amazon

by:Ennas      2021-11-13
2017 is the fourth year that Amazon has entered the Indian market in a big way, but obviously, it has already made two local e-commerce companies feel tremendous pressure. According to the Indian newspaper Mint, Amazon’s sales in India surpassed Flipkart for the first time in July last year. The latter has been established since 2007...  In April, it was reported that SoftBank was promoting the current Indian e-commerce The third-ranked Snapdeal (Indian version of Taobao) merged with India's No. 1 e-commerce platform Flipkart (India version of JD). On May 7, according to Reuters, the two companies will complete the merger within this week under the leadership of SoftBank.   By then, the triad status of the Indian e-commerce market will be broken, and local e-commerce companies will form an alliance to fight Amazon together.  SoftBank is the largest shareholder of Snapdeal and owns more than 30% of the shares. Since 2014, SoftBank has invested about 1 billion U.S. dollars in Snapdeal, but with Amazon's entry into India, Snapdeal was quickly overtaken. In February of this year, due to poor financing, Snapdeal also used layoffs and founders' salary cuts to reduce operating costs to complete self-help.   Flipkart has a relatively good life. In the competition with Amazon, it still maintains the number one position, occupying 43% of the Indian e-commerce market. However, due to slowing growth and other issues, Flipkart's valuation has been lowered several times. Recently, Flipkart raised 1.4 billion U.S. dollars. Investors include eBay, Tencent, and Microsoft. The valuation has rebounded to approximately US$10 billion. It is reported that in order to promote the merger process, SoftBank will also inject 1 billion US dollars into Flipkart, part of which may be obtained by purchasing shares of Flipkart's largest shareholder, Tiger Fund.   2017 is the fourth year that Amazon has entered the Indian market in a big way, but obviously, it has already made two local e-commerce companies feel tremendous pressure. According to the Indian newspaper Mint, Amazon's sales in India surpassed Flipkart for the first time in July last year, and the latter has finally taken the first place in the Indian e-commerce market since its establishment in 2007.   With the support of SoftBank, Flipkart will have more financial protection when it competes with Amazon for the Indian market. (Picture from: MxM India)    Reuters stated that the core figure driving the above series of transactions is SoftBank founder and chairman Masayoshi Son. Prior to this, SoftBank completed the investment in the early stage of Alibaba's development and obtained very rich results in the later period. In return, SoftBank believes that they can also create a new Alibaba in India. According to eMarketer data, Indian e-commerce temporarily only accounts for 2.5% of the entire retail market, with annual sales of approximately 23.3 billion U.S. dollars. However, there is a lot of room for growth of Indian e-commerce. It is estimated that this number will reach 80 billion U.S. dollars by 2020. 3 times.   In addition to SoftBank and Amazon, which are optimistic about the Indian market, Chinese capital is also very active in the Indian market. At present, both Tencent and Alibaba have joined the Indian e-commerce market. In addition to e-commerce, in terms of smartphones, Chinese brands such as OPPO, vivo, and Xiaomi have already accounted for half of the Indian market.
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