Flipkart, the Amazon of India, Just Got $1.5 Billion to Fight Their Biggest Competitor: Amazon


Amazon ($AMZN) is the biggest online store in America, but they don’t just operate stateside. Over the last decade-plus, the Washington-based retailer set up shop in more than a dozen countries, including Mexico, the United Kingdom, and India. In some of these countries, Amazon is just as popular as they are in America. In India, however, Amazon’s popularity is dwarfed by local, homegrown competitors.

Thanks to the company’s recent investments, that could change soon. In a bid to become the online retailer for India, Amazon invested billions into Indian startups, and they plan on investing billions more. By buying and acquiring local talent and companies, Amazon hopes to expedite their takeover of one of the largest countries on the planet.

There’s just one problem: Flipkart, a local Amazon competitor, is standing in their way. More importantly, Flipkart just got $1.5 billion to compete with Amazon and prevent the American company from claiming the number one spot.

Flipkart is Amazon, but for India.

The ecommerce company is around ten years old. They sell the same products Amazon sells, while providing their own electronic devices and product exclusives. Motorola and Xiaomi, two smart phone manufacturers, both have exclusive deals with Flipkart. The company also has their own delivery fleet, employing more than 33,000 people throughout the country.

Flipkart’s investors believe in the company’s ability to compete with Amazon.

Flipkart is valued at $11.6 billion after receiving $1.5 billion from Tencent, eBay, and Microsoft. This is nothing compared to Amazon’s $431 billion valuation, but still impressive for one of the leading online retailers in India. Flipkart raised this money so they can expand their delivery radius, product offerings, and business to become a more attractive option than Amazon. The company isn’t profitable yet, though they could be later this year. They might also acquire Snapdeal, another competitor, to better allocate their resources and take on Amazon.

Amazon is trying hard to beat Flipkart and Snapdeal to became the leading online retailer in India — if not the only one. There are millions more potential customers in India than any of Amazon’s existing territories, and being the top retailer for said customers could make the multi-billion-dollar company a trillion-dollar company. Simply acquiring local businesses, however, isn’t the best way for Amazon to win over Indian customers. Since Flipkart and Snapdeal know the market better and have the advantage of being Indian-founded and Indian-owned, they could use this expertise to out-Amazon Amazon.

Can you invest in Flipkart?

The difference between Flipkart and Amazon is rather major. Amazon is a publicly traded company that generates revenue not just from India, but from a multitude of countries. If Amazon fails to make a dent in the Indian market, their stock would take a dip but the company would otherwise be fine. Flipkart, on the other hand, is only in India. They’re also a private startup, meaning only venture capitalists can invest in them as of right now. If they don’t succeed in India and lose ground to Amazon, they could be in serious trouble.


Like it? Share with your friends!

8 SHARES
0
8 SHARES, 0 points

log in

reset password

Back to
log in
Choose A Format
Personality quiz
Trivia quiz
Poll
Story
List
Meme
Video
Audio
Image