It's Amazon vs Flipkart: A look at the e-commerce dynamism in India

The Indian online retail market is in flux. On April 10, Flipkart raised $1.4 billion and added Ebay, Tencent, and Microsoft to an investor list that already included Tiger Global Management, Naspers Group, Accel Partners, and DST Global. In addition, Softbank is working on selling Snapdeal, the third-largest online retailer in India, to Flipkart and investing in Flipkart to take on the rapidly growing Amazon. This realignment of investors follows the slowdown in India’s online retail growth rate in 2016. We at Forrester slashed our online retail forecast for India by more than a third (down from the $75 billion we estimated last year to $48 billion by 2020). This was due to demonetization, ecommerce restrictions, dwindling funding, and the slow growth in the number of buyers.

What does Flipkart’s news mean for the key players specifically and the market in general?

Flipkart gains funding and know-how
 

2016 was not a great year for Flipkart. However,  the company can now focus on growing the overall market by adding more buyers and categories to the online channel as well as improving the customer experience.

Amazon is India’s favorite online retailer
 

In contrast, 2016 was a great year for Amazon in India. According to the 2016 Forrester Data Consumer Technographics Asia Pacific Online Benchmark Survey, Amazon surpassed Flipkart as the preferred online retail destination for metropolitan Indian consumers for the first time since 2014.

Snapdeal has hit turbulent times
 

Most of the market share that Amazon gained came from Snapdeal, leading to a rapid decline in the company’s valuation (from $6.5 billion to around $1 billion). 

Alibaba is playing the waiting game
 

After selecting payment and ecommerce company Paytm as its key mode of investment in India, Alibaba is still waiting to enter the market fully.

This is an excerpt from the article published on Tech in Asia. You can read the full article here