The Indian e-commerce market has become a real battlefield, whereby global mammoth such as Amazon, Walmart and even Alibaba are competing fiercely to kick each other out of the landscape. The companies’ market strategy is mostly driven towards customer acquisition and retention, to own the most available market share.
Flipkart, the e-commerce giant founded by Indian entrepreneur was recently acquired by Walmart for 16 billion dollars two weeks ago for 77% stakes, making it boast a valuation of $20 billion. However, a report from Citi Research suggest that Amazon India can also be valued at the now significant milestone of $16 billion as well.
Indeed, Citi Research published a report last week in which it stated that Amazon India could possibly attain $70 Bn in Gross Merchandise Volume (GMV) and $11 Bn in net sales coming 2027.
“We believe that the India e-commerce market will grow at a 21% CAGR over the next ten years to reach a mark of $202 Bn, that Amazon could capture 35% of this market and that the company could generate more than $10 Bn in revenue and nearly $1.5 Bn in FCF (free cash flow) by 2027,” Senior Analysts Mark May and Hao Yan stated in the report.
“After disappointing results in China, Amazon – led by its founder and CEO Jeff Bezos – has been determined to win in India,” the report said. “India is poised to be one of the largest and fastest e-commerce growth markets for the next decade,” it further added.
The report also stated, “Amazon’s founder and CEO Jeff Bezos told us last year that he learned a key lesson in China that he does not plan to repeat in India – not being aggressive enough, and not investing enough.”
And Bezos’ intentions are clear after committing $5 Bn of investment in India to build his platform’s infrastructure and growth. The report further pointed out that Amazon India has 42 fulfilment centers, 150 delivery stations and 25 sortation centers.
Amazon’s Commitment in India
Amazon India began operating in mid-2013 and has since invested over $5 billion in the India market. In Januart, Amazon fueled its Indian unit, Amazon Seller Services with $306 Mn funding, bringing its total capital infusion to $1.3 Bn for FY18.
Recently, Amazon CEO Jeff Bezos shared a letter to his shareholders stating that its paid subscription service, Amazon Prime, had more members in India within the first year of launch than it did anywhere else in the company’s history. Prime selection now includes over 40 Mn local products from third-party sellers.