India's online retailers are busy with acquisitions and funding as they take on the world's biggest Internet shopping giant, Amazon, for dominance in the domestic market.
Flipkart, India's largest e-shopping portal, announced in April the takeover of rival Myntra in a deal estimated at $330 million.
As Amazon enters the fray, it is forcing domestic players to get critical mass to compete, said Ashish Jhalani, founder of Indian consultancy eTailing. It's still a fragmented sector and there will be more consolidation in the future, he added.
"Our role model is Alibaba," Flipkart's co-founder Sachin Bansal said. He added, “there's a lot of similarity between the Chinese and Indian online retail markets."
"What's happening in China is inspiring -- it's bigger than anything in the US," said Bansal.
Flipkart's merger with Myntra created an entity with annual sales of $1.5 billion, which is more than half of India’s online shopping market, estimated at $2.3 billion by Indian consultancy Technopak.
Venture capitalists have been pumping money into the sector. Till now, deals worth $497 million have been struck this year as compared to $592 in the last year.
"This sector used to be for the brave-pocketed but it's becoming viable and the profit light can be seen at the end of the tunnel," said Bansal.