Armed with fresh funding, Flipkart is set to give its arch rival Amazon a tough fight in cornering a larger share of the Indian e-commerce space. According to analysts, Flipkart can sustain the advantage if it effectively uses these funds to improve profitability over the medium-to-long term.
“There was a feeling in the industry that it is just a matter of time before the Flipkart story loses steam. But the new round of funding reassures the Flipkart team that they have enough muscle power to keep Amazon at bay in the near term,” said Ashish Jhalani, Founder & CEO of eTailing India.
“Investing in technology will make the company more efficient and, hence, profitable. Better analytics means better ability to map customers. It will give Flipkart useful insights on which products are selling well and which aren’t,” said Jhalani.
But will this have any impact on Amazon? Arvind Singhal, Chairman and Managing Director of advisory firm Technopak believes the latest funding would not have come as a surprise, given the heightened interest in India’s burgeoning ecommerce space.
“There would be no impact on Amazon, which would continue to invest in India through its global resources,” said Singhal.
The cash-rich giant could very well invest $2 billion in India (if it chooses to) without making any noise, he added.
Amazon on expansion Despite being a late entrant in India, Amazon has been aggressively ramping up its presence. On Monday, the company announced that it would open five more fulfilment centres, or FCs, in Delhi, Chennai, Jaipur, Ahmedabad and Tauru (in outskirts of Gurgaon). These FCs are warehouses from which Amazon ships products to buyers across India.