India’s largest e-commerce marketplace Flipkart, says it has crossed the 75 million registered users milestone on its platform, with growth being led by users coming from tier-II and tier-III towns. While this doesn’t necessarily translate into transactions, Flipkart is the first Indian Internet company to tap such a large base of users. The announcement comes hot on the heels of Flipkart becoming the first Indian app to cross the 50 million-download mark on Google’s Android Playstore, signifying that bulk of its new users are on mobile.
With sales of smartphones in the country shooting past the 100 million mark in 2015, India is expected to be the fastest growing ecommerce market for the next three to five years.
US online retailer Amazon and its Chinese rival Alibaba are making significant investments in India to capture the nascent online retail market. India is seen as the last big market opportunity globally, with a big chunk of foreign investments coming into e-commerce in the country being diverted towards e-tailers Flipkart, Snapdeal, Amazon and Paytm.
Flipkart says over 50 per cent of the traffic on its website and apps come from non-metros and that share is growing quickly. As smartphones and reliable data connectivity penetrate beyond large cities in India, more people are turning to online shopping as products are cheaper and also due to the lack of offline availability in smaller towns.
Morgan Stanley, which has a minor stake in Flipkart, in a February report marked down the value of its share in the company by 27 percent. The move meant the company, which was valued at $15.2 billion was now worth $11 billion. The report however maintained that Flipkart was leading the e-commerce battle in India with 45 per cent market share.
A telecom regulatory authority of India (TRAI) report in March showed that India’s broadband Internet population had grown to 121 million, roughly equating to Flipkart having access to over 60 per cent of all them, the company said in a statement. “Flipkart’s registered customer base stands at over 60% of the entire wireless and wireline broadband connections in India.”
While more and more users are coming onto the Internet and accessing e-commerce services such as Flipkart in India is certainly rising, the number of transacting users online is far less. Accel Partners, one of the most active early-stage venture capital investors in the country, in 2014 had predicted that India will have 40 million transacting users by 2016, however, experts peg that number hasn't crossed 30 million so far.