The Indian e-commerce market is projected to grow more than 85% from $49 billion (INR3.4 trillion) in 2019 to $91 billion (INR6.3 trillion) in 2023, according to data and analytics company GlobalData. That compares to the estimated $586 billion-plus US consumers spent in 2019 on e-commerce.
Within the rapidly growing Indian e-commerce marketplace, Walmart-owned Flipkart is consolidating its hold as the biggest player in the market. Flipkart owns higher-end fashion retailer Myntra as well as bargain fashion retailer Jabong which it acquired for $70 million and merged and operated as a subsidiary of Myntra.
Flipkart has closed Jabong rather than sell it to a competitor and will now focus on the growth of its successful Myntra brand.
$59.3 billion clothing market by 2022
McKinsey’s FashionScope estimates the Indian clothing market will reach $59.3 billion by 2022 comparable to the size of the UK and German markets although only 10% of fashions are currently purchased online in India.
Flipkart, Myntra and Jabong together controlled 70% of this online fashion marketplace and Walmart has made the call there’s no point competing with itself in the lower-end clothing market.
Walmart took a $290 million “non-cash impairment charge” last November on its investment in Jabong and so the writing was on the wall.
Indian e-commerce competition heats up
Various Indian news media have reported on an exit of senior management from Flipkart which could lead to interesting new startups in the competitive and fast-growing e-commerce market.
Amazon CEO Jeff Bezos recently announced a $1 billion investment to help small and midsized Indian businesses digitize their operations and encourage e-commerce growth within India and internationally.
Indian Commerce and Industry minister Piyush Goyal was distrustful of Amazon’s business model and its intentions saying controversially, “They may have put in a billion dollars, but if they make a loss of a billion dollars every year, then jolly well they have to finance that billion dollars. So, it’s not as if they are doing a great favor to India when they invest a billion dollars.”
The minister later said his comments were misconstrued and the government welcomes foreign investment within its regulations.
Amazon India VP of seller services Gopal Pillai told The Economic Times of India his company is focused on longer-term growth. He pointed to more than 50 world-class multimillion-dollar fulfillment centers built in the country, as well as assistance with 800,000 jobs for artisans and weavers and support for more than 280,000 women entrepreneurs.
Pillai also said Amazon hopes its efforts will encourage more than $10 billion in Indian product exports by 2025.
You can read more about India’s trillion-dollar payments market here.
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