ALSO READDiscount wars are brewing as Amazon, Flipkart fight for market share SoftBank backs Flipkart with $2.5 billion to take on Amazon Flipkart eyeing 70% market share to maintain lead over Amazon Masayoshi Son confirms SoftBank is still in talks to back Flipkart Flipkart looking to 'Chinese' model of e-commerce growth via acquisitions
Masayoshi Son, founder and chairman of Japanese investment giant SoftBank, claimed that the company’s two largest investments in India — Flipkart and Paytm — enjoy majority market share in their respective spaces, and were ahead of their local and global rivals. During the announcement of SoftBank’s quarterly results, Son made a case for the company’s $100-billion Vision Fund, from which the two Indian firms received a combined $3.9 billion this year. “Flipkart, India’s number one e-tailer has 60 per cent share in the domestic e-commerce market and is bigger than Amazon India. It is very difficult to see someone who is bigger than Amazon,” Son said on Monday. “I believe, after China in terms of size, India should be next, and in a market with such huge potential Flipkart has 60 per cent market share which is a good start.” Flipkart claims it has captured 70 per cent of India’s e-commerce market after seeing huge success in the recent festive sale period, and is almost twice the size of its rival Amazon. The company is aggressively looking at expanding its market share after raising $1.4 billion led by Tencent and another $2.5 billion from SoftBank earlier this year. Son said the Vision Fund’s other big investment in India, Paytm, controls 58 per cent of the digital payments market, and that the company had grown by 230 per cent year-on-year in the 12 months to March 2017. “In China, Alipay has been successful as a business model and Alipay and SoftBank support Paytm. Again, thanks to the Alibaba Group, we are the second-largest shareholder in Paytm,” Son added. Paytm was benefitted massively from the government’s demonetisation exercise in November last year, which helped it extend its lead over rivals such as FreeCharge and MobiKwik.
So far, India’s digital payments had space lacked a large foreign player, but with the recent entry of Google’s Tez and the upcoming launch of WhatsApp payment feature, Paytm is likely to face competition.While Son is bullish on India’s e-commerce market, his past bets have not panned out as planned. After investing nearly $1 billion in Snapdeal, he was forced to write it off as a loss, when Amazon began cannibalising its market share, and overtook it to become the second-biggest e-commerce marketplace in India. An attempt to merge Snapdeal with Flipkart earlier this year failed, after which SoftBank decided to invest independently.