Flipkart announcement that it has sealed a $700 million round of funding continues to elicit debate as to how successful Amazon.com, Inc. (NASDAQ:AMZN) will be in the Indian e-commerce space as competition continues to heat up. During an interview on CNBC, Jina Ventures Managing Partner, Ron Shah, reiterated that the hefty financing indicates the pace at which the e-commerce space is growing in India.
Infrastructure development is poised to be key according to the analyst in the push for market share in the India’s e-commerce landscape.
“Right now what you have to look at is not the consumer acquisition it’s what they’re doing in infrastructure. Amazon.com, Inc. (NASDAQ:AMZN) for instance they just announced they are going to do drone deliveries; they are thinking ahead. I think they basically have to figure out infrastructure logistics and payments and the person that does that the best and the fastest is going to win the game,” said Mr. Shah.
India’s 1 billion worth population continues to be one of the most attractive features of the country’s e-commerce space for the likes of Amazon, who are looking for other avenues for growth. The financing essentially throws into doubt Amazon.com, Inc. (NASDAQ:AMZN)’s ability to sustain its top spot in the country with 15.4% market reach compared to FlipKart’s 11.5%.
India’s e-commerce market is poised to clock $3.5 billion in transactions this year at the back of a steady growth that is poised to reach highs of $6 billion in 2015. Amazon.com, Inc. (NASDAQ:AMZN) has already affirmed plans to tap into this space going into next year as the e-commerce penetration levels continue to gain traction. The Financing is poised to give Flipkart the muscle to go head on, against Amazon in the push for market share.
Amazon.com, Inc. (NASDAQ:AMZN) could on the other hand benefit from Flipkart ploughing ahead and investing in infrastructure development, which should provide more details on what ought to be done in the long term with precision.
“Flipkart has $1.7 billion n hedge funds and VC money breathing down its neck; Amazon.com, Inc. (NASDAQ:AMZN) can take its time and learn from Flipkart mistakes,” said Mr. Shah.
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