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The battle for India’s e-commerce market is about much more than retailing

The battle for India’s e-commerce market is about much more than retailing

EVERY second three more Indians experience the internet for the first time. By 2030 more than 1 billion of them will be online. In June last year one in four mobiles used in India was a smartphone, up from one in five just six months earlier. Add in two more facts—India boasts the world’s fastest-growing large economy, and the planet’s biggest population of millennials—and you can see why the likes of Facebook, Uber and Google are falling over themselves to establish footholds there.

No battle for the online future of India is more intense than the one now being waged in e-commerce (see article). Sales are still tiny, at $16 billion last year, but the country is the world’s fastest-growing e-commerce market and is prized by America’s and China’s internet titans. India has become the biggest test of Amazon’s international ambitions. Jeff Bezos, Amazon’s founder, wants it to be his second-largest market, after America, and has backed his plans with billions of dollars of investment. His opponents are platforms like Flipkart and Snapdeal, founded by locals and funded by some of the biggest names in tech, among them Alibaba, China’s e-commerce champion.

As these companies jostle for market share, they are spending feverishly on logistics and discounts to lure consumers online. Capital may dry up for some; in February a Morgan Stanley mutual fund sharply lowered the valuation of its stake in Flipkart. But whoever wins or loses in this frenzied contest, the importance of e-commerce stretches beyond individual firms and into the wider economy. In the West e-commerce companies piggybacked on an existing infrastructure of shops, banks and logistics firms. In India the game being played by the e-commerce pioneers is leapfrog. It could become a model for emerging markets around the world. Read More…

The battle for India’s e-commerce market is about much more than retailing

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