Finding a way into India’s vast but vexing market has long frustrated foreign retailers. Now, overseas investors are pouring billions of dollars into e-commerce ventures that are circumventing the barriers holding back retail powers such as Wal-Mart and Ikea.
Some investors see India as the world’s next big e-commerce opportunity, with the upcoming mammoth public stock offering of Chinese online giant Alibaba hinting at the potential.
Online shopping is still in its infancy in India at $2.3 billion of an overall $421 billion retail market in 2013, according to research firm Crisil. But it is growing fast and the potential of reaching a mostly untapped market of 1.2 billion people has sparked a funding-and-expansion arms race.
Flipkart, a Bangalore-based company founded in 2007 by two former Amazon employees, last month announced it had raised $1 billion in mostly foreign capital after building its registered users to 22 million.
A day later, Amazon raised the stakes with founder Jeff Bezos saying the company would pour $2 billion into developing its India business.
Snapdeal.com, another Indian e-commerce contender, has raised at least $234 million in the past year, and recently local media have reported that Rajan Tata of India’s Tata Group conglomerate is considering a personal investment in the company.
via Online sites shake up hidebound retailing in India – Businessweek.
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