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This Will Remain Amazon’s Key Market

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After failure in China, is India the next growth frontier?

India ranks high on the list for Amazon.com (AMZN) as the e-commerce giant targets international markets—especially now that it has failed to penetrate the Chinese market. Amazon has only a negligible market share in China because the market is dominated by local players like Alibaba (BABA) and JD.com (JD).

In India (EPI), as well, Amazon faces tough competition from local players like Flipkart and Snapdeal. But given its efficient operations and marketing, Amazon now claims to be the number one player in India, and it has thus committed to spending $5 billion in this market during the next few years.

eCommerce market growth in India

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Flipkart and Snapdeal rise up to the competition

Flipkart is reportedly in fresh talks with Wal-Mart Stores (WMT) about investing $1 billion, according to a report from Livemint. Snapdeal, meanwhile, has garnered investments from Alibaba and SoftBank in the past, and because India remains a fast-growing e-commerce market, all the major players seem eager to invest there.

According to a report from eMarketer (and as the chart above shows), the Indian e-commerce market is estimated to have grown 55% in 2016. In its previous forecast, eMarketer projected that this market would grow 75%, but it revised its projection downward, mainly due to the Indian government’s decision to demonetize high-value denominations of the Indian rupee. While this growth is expected to slow down over the next few years, it’s still likely to remain healthy.

 

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