After Amazon, Flipkart, Reliance and Tata Neu, India's $133 billion ecommerce market may be too little for a fifth player
Image by Pabitra Kaity from Pixabay
- The Indian ecommerce space may soon run out of space to accommodate any more players if another big player tries to make an entry, according to a report.
- Bernstein has maintained that the Indian ecommerce sector would not be a “winner take all” opportunity.
- The four biggest players in the segment are Amazon, Flipkart, Reliance and Tata Digital.
AdvertisementEvery big Indian business has been chasing the ecommerce space, which is expected to clock half a billion users by the end of this decade. Whether it’s Amazon, Flipkart, Reliance JioMart or Tata Digital’s latest super app Tata Neu, everyone has been leaving no stone unturned to dominate the customer demand and mindspace.
Now, a new report by JM Financial has revealed that we may soon run out of space to accommodate any more players. The Indian financial services company noted that the entry of another large player into the already “crowded” ecommerce space could instead lead to further consolidation, which will be harmful for smaller players trying to make a mark.
“Smaller “me-too” players are likely to lose out. Further, we see these large players continuing their hunt for specialised e-commerce players to fill their portfolio gaps in order to maintain leadership. Besides, we could see them acquiring e-commerce enabling companies, e.g., logistics, data analytics, etc. to support organic growth,” the report added.
Meanwhile, Bernstein has maintained that Indian ecommerce would not be a “winner take all” opportunity due to low ecommerce penetration of different categories and customer segmentation. The private wealth management firm noted that ecommerce is the largest segment in India internet and is expected to grow more than five-fold to reach $133 billion by 2025.
Tata Neu may eat into Amazon, Flipkart and Reliance’s share
Tata Digital’s superapp Tata Neu — which brings all of its digital services and apps on a single platform — is the latest one to join the battle. Even though none of the brands or banners launched under the super app are new, the consolidation of them all under one banner has given an advantage to the company especially when it comes to personalisation of products.
JP Financial noted that Tata Neu sells almost 95% of overall e-tailing segments, ranging from electronics to clothes to shoes to groceries through brands like Westside, Tata CLIQ, Croma and BigBasket. The platform also offers flight tickets, jewelry and would add more product lines or brands in the time to come. It is expected to clock $20 billion in sales by the end of this decade.
Source: Media reports, Jefferies, Bernstein
|Company||Monthly Active User|
|Reliance JioMart||5 million|
|Tata Neu||2.2 million**|
*The Data is based on Bernstein analysis
**Tata Neu announced that it recorded 2.2 million downloads in the first week of its launch in April 2022.
Tata Neu is well placed to take market share away from its existing competitors like Flipkart, Amazon, Reliance Retail, the report added. Reliance Industries had launched JioMart in 2019 to sell groceries online, the platform maily competed with BigBasket (now owned by Tata) and Zomato-backed Grofers (now called Blinkit).
The Mukesh Ambani-led company later decided to expand JioMart’s offering to include clothes, accessories, household items and more to give tough competition to Amazon and Flipkart.
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