When Jio Mart --- a potentially powerful e-commerce venture from Reliance Retail and Jio Platforms --- started rolling out in 200 cities across India, it was expected to stir up the market.
While Amazon is still calibrating its plans to the developments in India, the other major player Flipkart seems to be girding up its loins, as it were, with a well-timed financial infusion.
Walmart, which acquired a majority stake (77%) in Flipkart for $16 billion two years ago, has again led a new 1.2 billion financing round. Flipkart’s valuation has risen almost 20% since Walmart's original investment. The identity of other investors who have chipped in with Walmart has not been revealed.
"The investment is led by Walmart, Flipkart Group's majority owner, along with a group of existing shareholders and values the company at $24.9 billion post-money. It will be funded in two tranches over the remainder of the fiscal year," Flipkart said in a press statement.
Flipkart CEO Kalyan Krishnamurthy said, "Since Walmart's initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships and new services. Today, we lead in electronics and fashion, and are rapidly accelerating share in other general merchandise categories and grocery, all while providing increasingly seamless payment and delivery options for our customers. We will continue innovating to bring the next 200 million Indian shoppers online."
- Your local kirana store can now be listed on Amazon India
- Reliance Jio Mart launched - how will it impact India's e-commerce?
- Nearly half of eCommerce searches on Google drive no traffic
Much-needed money
The latest capital tarnsfusion is expcted to help Flipkart to put up a fight against the new, but tough competitor Jio Mart.
Jio Mart is of course backed by the ever-aggressive Reliance Industries. When Reliance entered the telecom sector, it completely decimated the competition in around 4 years, and is now the undisputed leader of the pack in the world's largest internet market.
Jio Mart is expected to bring to fore the same no-nonsense approach in this even more competitive e-commerce segment. Jio Mart will understandably fall back on the strenghts of Reliance Retail and Jio Platforms.
Reliance Retail, in its brick and mortar avatar (it has over 10,000 stores in 6500 cities), already serves more than 3.5 million customers each week. Jio Platforms, of course, has been on a streak, and its deals with Facebook and WhatsApp is what is expected to pilot Jio Mart's efforts.
Reliance is also set to take over the other big retail player in India, the Future Group.
In the event, the fresh round of funding will help Flipkart to not only wage a battle against Jio Mart but also against the other big player Amazon which is slowly expanding its footprint in India.
Flipkart is no pushover
Founded in 2007, the Flipkart Group includes Flipkart, digital payments platform PhonePe, fashion specialty site Myntra and eKart, a logistics and delivery service focused on solving the last mile in India's Tier II and Tier III cities.
The company, in the press release, said that it recently surpassed 1.5 billion visits per month and reported 45-percent growth in monthly active customers and 30-percent growth in transactions per customer for FY20.
Flipkart said its active customers figure surged 45% in the financial year that ended in March this year, compared to the year before, and these customers are making 30% more transactions. The 13-year-old firm said it recently surpassed 1.5 billion visits per month.
Flipkart is also providing sellers and MSMEs access to a national market and by investing in technology such as voice assistants and local language interfaces to help make shopping easier for non-English speaking customers. Today, Flipkart offers 150 million products across more than 80 categories. PhonePe recently reported annualized total payments value (TPV) of $180 billion on more than 500 million monthly transactions.
"Flipkart continues to leverage its culture of innovation to accelerate growth and enable millions of customers, sellers, merchants and small businesses to prosper and be a part of India's digital transformation," said Judith McKenna, President and CEO of Walmart International.
The carrot of $100 billion
But why are these firms so very interested in India? Quite obviously, the potential is immense. The sheer numbers that the Indian market offers is enticing for most companies. India’s e-commerce market is estimated to reach more than 300 million shoppers by 2025. And the expected amount that these shoppers are expected to spend is $100 billion.
With so much money up for grabs, little wonder that companies are pulling out all stops in their bid to capture one of the most enticing markets in the world.
0 comments:
Post a Comment