E-retailers in India may have used up anywhere between $10 billion and $12 billion in their efforts to build a business. Despite this, there are just about 10 million active online shoppers, says HSBC citing Flipkart.
E-retailers in India may have used up anywhere between $10 billion and $12 billion in their efforts to build a business. Despite this, there are just about 10 million active online shoppers, says HSBC citing Flipkart. However, the brokerage’s research team notes that over the long term the spoils could be huge with the market estimated to grow fivefold over the next five years from levels of $12 billion currently, driven by digital payments and the mobile data 4G ecosystem. That’s possible, say industry watchers, given e-retailing accounts for barely 2% of the Indian retail market. While two large players have been able to consolidate the market making it harder for a third players to build meaningful market share, HSBC believes the market is small as yet and as such it might be too early to discuss market shares or even the potential size of the market.
“As the market is small today it is all about incremental market share and discussions around potential size of Indian e-commerce market or market shares are irrelevant and it is going to be more about the long term approach going forward, as players are no longer running a sprint, they are running a marathon and this calls for changing gears”, analysts wrote in a recent report.
Deep-pocketed investors continue to support Indian e-commerce ventures. Funding in e-commerce/internet firms nearly doubled to $7.21 billion between January and August from $3.33 billion in the comparable period of 2016, data from Tracxn Technologies show. The bulk of the investment has come in from Japan’s SoftBank Group, which infused money into both Flipkart and Paytm.
In all, SoftBank has decided to bet about $4.3 billion across the two businesses. Excluding the Japanese investor’s commitment, e-commerce and internet firms raised a little less than $3 billion between them.