How India’s E-commerce Market is Taking Shape, and What Does this Mean for the Rest of the World?

While there’s no doubt that the world’s emerging economies are thriving in the e-commerce space, some are growing at a more considerable rate than others.

India is arguably the single most fascinating e-commerce market in the current economic climate, and one that has thrived on the back of significant wage growth and sustained technological advancement. As a result, the market has been shaped by a number of startup acquisitions and mergers over the course of the last two years, while rumours continue to circulate about potentially larger deals on the horizon.

Below, we’ll look at these deals in closer detail, while asking what they mean for the global marketplace?

A Look at India’s Recent E-commerce Deals

One of the most influential and talked about deals to date took place in April last year, when dominant e-commerce brand Flipkart acquired eBay India. From the seller’s perspective, the deal enabled them to exchange a loss-making entity with a 5.4% stake in a growing and prosperous venture, while the buyers were able to add to an impressive arsenal that also includes Myntra and Jabong.

Overall, the acquisition also helped to stabilise one of the world’s most promising e-commerce marketplaces, while laying a foundation for future expansion.

Recently, it was reported that Flipkart itself may soon emerge as a target for a high value acquisition, with both Amazon and Walmart positioning themselves as potential buyers. Apparently, both parties are in advanced talks with India’s e-commerce market leader, in the quest to secure a 51% company share and assume control of  a vast and lucrative industry.

While some believe that Amazon are the favourites to complete the deal, such an acquisition would most likely be subject to scrutiny from the Competition Commission of India. This is because the deal would see both Amazon and Flipkart evolve to dominate the nation’s e-commerce sector, creating a virtual monopoly that regulators may look to avoid. The same issue would not apply to Walmart, meaning that they may ultimately be in the best place to secure a viable deal.

How will India and the World’s E-commerce Market React?

Regardless of which U.S. giant purchases Flipkart, it’s clear that India (and indeed the wider Indonesian region) has successfully established itself as one of the world’s most promising e-commerce sectors.

It’s certainly one of the fastest growing in Southeast Asia, while the market’s infrastructure also mirrors that of China from around a decade ago. More specifically, India’s marketplace includes a large and diverse pool of international vendors who sell goods through recommendations and online referrals.

Given that China has since grown to become the biggest e-commerce marketplace in the world, this marks a clear growth path and one that could see India overtake similarly sized entities such as Russia and Brazil.

Not only could the acquisition of Flipkart expedite this evolution and trigger a shift in the global e-commerce landscape, but it also highlights the growing focus on mobile sales. After all, India is considered to be one of the world’s leading mobile-first nations, with around 70% of the nation’s Internet traffic originating from smartphones and tablets.