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 › Industry › Why Investors are willing to invest on Amazon & Flipkart ?

Why Investors are willing to invest on Amazon & Flipkart ?

Gaurav August 3, 2014     1 Comment    

By Gaurav Pradhan

flipkart-amazon

 

 

 

 

 

 

 

Online Retail is attracting money. This is a good sign for e-Commerce industry. On July 29th, Flipkart Internet Pvt. – India’s Largest e-commerce company- confirmed the news of raising USD $ 1 billion, for improving their business which is facing stiff competition from Amazon.com and EBay Inc.

Next day, Amazon India announced that it is going to invest USD $ 2 billion for their retail business. They are denying the speculations of reacting on its rival’s move. But it is evident that they are very serious about Indian market.

Flipkart – The Indian E-Commerce Giant

Flipkart was started by two former Amazon executives in 2007, based in Bangalore. Now, it is sitting on 26.8% market share of Online Retail in India. Because of such a market presence, they are able to attract investments. The recent fundraising is targeted to hire technological staff and develop mobile technology platforms. This move is made keeping the fact in mind that more than 50% of Online Sales is through Mobile Platform. This investment has also pushed the company’s valuation close to USD $ 7 Billion.

Amazon – The American E-commerce Leader

Amazon landed in India in 2012 through Junglee.com, a price-comparison website. Then in June 2013, it launched its website starting with sale of products like books, DVDs, fashion accessories and electronic goods. Amazon is now trying to scale up and increase the reach. It has distribution warehouses in Mumbai and Bangalore. With this investment, they are planning to increase the number of warehouses in different locations like Ahmedabad, Chennai, Delhi, Jaipur and Gurgaon.

The question – Why The Big Fight ?

ecommerce-in-india-3-big-players

India is slowly getting more aware and open towards online shopping and e-commerce. A study suggested that E-commerce is going to grow at a fast rate, almost 11 times, to $ 23 Billion in near future, a span of 4-5 years. The reason can be attributed to the rising disposable income of Indians and their growing affinity for online shopping like buying phones, shoes, apparels, books and other products.

It is seen that in coming days, there will be millions of products which will be shopped online. New Technology will also help to improve the shopping experience- truly Shopping at your fingertips. This will also help in providing better deals every time. No matter how many companies fight this battle – Customer will be the King.

(Author is a Management student of IIM Bangalore having an experience in Manufacturing Industry, Follow On Twitter @GauravToYou)

Also Read

IBM and Apple, A US$ 50 Billion Market Partnership: ‘Beauty’ with ‘Brains’ to Rule Enterprise Business – Social Media Trend – https://www.socialmediatrend.in/technology/ibm-and-apple-partnership-beauty-with-brains-to-rule-enterprise-business/

How High Will Amazon’s Drones Fly ? – Social Media Trend – https://www.socialmediatrend.in/technology/how-high-will-amazons-drones-fly-2/
E-tailer Flipkart raises $1 billion in funding – Reuters India – http://in.reuters.com/article/2014/07/29/us-india-flipkart-fundraising-idINKBN0FY0WS20140729

Amazon to invest $2 bln to expand in India – Newsday – http://www.newsday.com/business/indian-online-retailer-flipkart-raises-1-billion-1.8922019

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Author: Gaurav

Gaurav Pradhan, An IIM Bangalore graduate, presently Analyst in Web Technology & Digital Experience . A Social Media Enthusiast who believes that Social Media can be a platform for communication and management. Follow him on @GauravToYou

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