Alibaba all set to buy stake in Flipkart which could create trouble for Amazon in India.
It will not be wrong to say that India’s e-commerce market is significantly improving, considering the business its domestic online retailers are doing in such an environment. India is a developing country, which is currently struggling to create a user base that is more into online than offline. It will be difficult but most of them are transforming and keeping up with the change. International online retailers know the significance of the Indian market. This is the reason as to why Amazon Inc. is constantly increasing its investment in the region.
Amazon says that investing in India is like a next trillion dollar opportunity; hence it is placing more emphasis on expanding its reach in the region. The US retailing giant is competing against the domestic leaders, Snapdeal and Flipkart, and it is doing quite well considering it is a foreign marketplace. Now another international tech giant has come in the equation to make its mark in the market. It is said that Alibaba is closely watching Amazon’s investment in the industry and it is not far behind in catching up to the online retailer in the near future.
Furthermore, if reports are to be believed, then Alibaba might be interested in buying a stake in Flipkart, which is India’s leading and largest e-commerce platform. Flipkart is the biggest and closest competitor to Amazon – which is accountable for about 44% of the market share of the Indian market, whereas Amazon currently has only 15% market share. It is not necessary that Alibaba will expand its reach in India to take on Amazon but it has various plans to make it happen.
The Chinese tech giant already holds a stake in Snapdeal, which is the second biggest Indian e-commerce platform, as well as 40% stake in Paytm, which is India’s first online payments platform.
Sources suggest that Alibaba will look to expand its global footprints in India through Flipkart and if the deal goes through successfully then it may make a strong and positive impact on the market. Moreover, the deal would create a ‘strong competitive front’ against Amazon and, surely, Alibaba will have the upper hand, all thanks to Flipkart.
Flipkart and Snapdeal both have a combined market share of 75% and if Alibaba buys stake in Flipkart then it will further strengthen its position. Flipkart already leads in e-commerce sector and this deal would further give a jump leaving Snapdeal and Amazon behind.
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