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E-Commerce Battleground Shifts to India for Amazon, Walmart, Alibaba
India is now the battleground for retail giants Amazon, Walmart and Alibaba. After focusing on China in recent years, the trio of e-commerce competitors are setting about building operations in India, the world’s second most populous country and one that features liberal ownership rules, not to mention tremendous opportunity.
E-commerce accounted for just 5% of Indian retail sales in 2015, or roughly $30 billion, according to the India Brand Equity Foundation. By 2020, the share is expected to grow to 12% and account for $120 billion in sales.
Amazon recently launched a food retail operation in India, becoming the first foreign e-commerce company to do so. Walmart is reportedly negotiating to take a 40% stake in Flipkart, an Indian e-commerce giant. Meanwhile, Alibaba has made significant investments in Indian e-commerce, online grocery and logistics firms over the past year.
Global retailers’ moves into India were stifled by restrictions on foreign direct investment. Since 2012, a foreign company could only own up to 51% of a multi-brand retail operation in India. In 2016, that changed, and now 100% ownership in food-only retail is allowed, so long as the food is produced and packaged in the country.
Previously, Amazon operated in India as a pure marketplace of third-party sellers. This month, Amazon launched a pilot program in India to sell food products on its own Amazon.in marketplace. Amazon reportedly has 41 fulfillment centers, 25 sortation centers and 150 smaller delivery stations in India.
Walmart’s deal with Flipkart would bring the homegrown leader in Indian e-commerce into the Arkansas-based retailer’s fold. Flipkart operates as a marketplace, and it does not own the inventory sold on its platform.
Among Alibaba’s Indian acquisitions since 2017 are stakes in marketplace Paytm Mall, online grocery retailer BigBasket, and logistics firm XpressBees.
For comments, questions or concerns, please contact Dennis Kaiser
