Flipkart’s announcement of the $1 billion funding that it had received appears to have jolted global online retail giant Amazon.com, that wasted no time in upstaging the homegrown Flipkart, started by two of its former staffers, by announcing a $2 billion investment in its one-year-old India operations. US-based Amazon, which declared a loss of $126 million on revenue of $19.34 billion in the second quarter of 2014, is banking on the Indian market to shore up its balance sheet. In one year of operations in India, it has seen rapid-fire growth but is yet to give its competitors like Flipkart a tough fight. Now it seems this is about to happen. The Indian retail market is around $500 billion, of which the e-commerce space is just $3 billion. The scope is tremendous in this virgin market, and Amazon’s deep pockets and its objective of raising the bar of innovative services for consumers has already sent ripples in the e-commerce sector.
The competition between biggies like Amazon, Flipkart and Snapdeal is likely to be fierce, but in the price and service warfare the numerous smaller players will have to scamper for funds to stay afloat. There could be some more mergers and consolidation like the Flipkart-Myntra deal, in the offing. The pie is huge, and there’s no reason why more players can’t survive, given that the retail space is wide open for those with innovative ideas and the will to be different.
