FLIP­KART ON TOP WITH 57% MAR­KET SHARE: NASPERS

Business Standard - - FRONT PAGE - More on busi­ness-stan­dard.com ALNOOR PEERMOHAME­D

Flip­kart re­gained mar­ket share from ri­val Ama­zon — show­ing steady growth in the nine months to March 2017 — af­ter which it raised a mas­sive $1.4 bil­lion at a valu­a­tion of $11.6 bil­lion.

Ac­cord­ing to Naspers, one of the largest in­vestors in Flip­kart, the e-com­merce firm’s mar­ket share, among the top three play­ers in In­dia, grew to around 57 per cent in March 2017, from 45 per cent in June 2016. Part of the in­crease was on ac­count of adding sales fig­ures from Myn­tra and Jabong since Septem­ber 2016.

“Com­pe­ti­tion has in­ten­si­fied in the past year, with Ama­zon gain­ing mar­ket share in the early part of the year. Flip­kart has main­tained its lead­er­ship po­si­tion, with re­cent mar­ket share trends sug­gest­ing gains,” South African In­ter­net in­vestor Naspers said in a state­ment.

The growth prompted Naspers to par­tic­i­pate in Flip­kart’s lat­est round of fund­ing with an in­vest­ment of $71 mil­lion, rais­ing its to­tal share­hold­ing in it to 16.5 per cent. Naspers says it is bullish on In­dia’s e-com­merce space with es­ti­mates sug­gest­ing it could hit $50 bil­lion by 2020.

Past an­a­lyst re­ports had sug­gested that Flip­kart’s mar­ket share had re­mained stag­nant through most of 2016, while Ama­zon’s was grow­ing by leaps and bounds by claw­ing away Snapdeal’s share of the mar­ket. Naspers’ es­ti­mate shows that Flip­kart’s mar­ket share surged by 5 per cent in just the three months from Jan­uary to March.

Flip­kart is now look­ing at strength­en­ing its lead over Ama­zon by ac­quir­ing Snapdeal, a deal which is be­ing pushed by Ja­panese in­vestor SoftBank. While ex­perts are split over whether the deal makes busi­ness sense for Flip­kart, it seems to be driven to bring SoftBank, a long-term in­vestor with deep pock­ets, on­board.

While Flip­kart is show­ing gains, Ama­zon, too, says its busi­ness grew by 85 per cent in the three months that ended March 2017, when com­pared to the cor­re­spond­ing quar­ter last year. In a re­cent in­ter­view with Busi­ness

Stan­dard, Ama­zon In­dia Coun­try Man­ager Amit Agar­wal said that he ex­pected In­dia’s e-com­merce mar­ket to grow by dou­ble dig­its for many years to come.

“The rea­son I think we’re still grow­ing at this pace is cus­tomers are shop­ping more, Prime mem­bers are spend­ing more, new cus­tomers con­tinue to come to us. Ama­zon.com at its cur­rent scale is still grow­ing at 30 per cent plus, and the US mar­ket is 100 times big­ger than In­dia,” said Agar­wal.

Ma­jor­ity of the $1.4 bil­lion Flip­kart raised this year came from Ten­cent, eBay and Mi­crosoft, all seen as strate­gic in­vestors, es­sen­tial if the com­pany wants to bat­tle Ama­zon and Alibaba. By in­vest­ing in Flip­kart, SoftBank will be hedg­ing its bets in In­dia’s e-com­merce space, as it is al­ready the big­gest share­holder in Alibaba.

In­dia’s e-com­merce mar­ket en­tered 2017 on a pos­i­tive note, with the over­all mar­ket show­ing healthy growth af­ter a year of cut­backs.

Flip­kart’s mar­ket share grew from 45% to 57% in the nine months to March Naspers in­vested $71 mn in Flip­kart to raise its share­hold­ing to 16.5% In­dia’s e-com­merce mar­ket is es­ti­mated to grow to $50 bil­lion by 2020

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