Ripples Advisory, Amazon looks set to take the lead in India, with or without Flipkart
Amazon is set to dominate India’s e-commerce market, unless, of course, Walmart and its investors have a change of heart with regards to cash burn
Who will win India’s promising market for internet commerce? A company with deep pockets and an almost limitless capacity to bear losses. Amazon.com Inc. fits the bill. Its investors don’t bat an eyelid when the firm announces large amounts of cash burn every other year.
It seemed like the US company had met its match when SoftBank Group Corp invested $2.5 billion in Flipkart last year. Led by maverick tycoon Masayoshi Son, SoftBank never seems to be short of funds or the appetite for taking wild risks.
Reports now suggest Walmart Inc. will replace SoftBank as the lead investor in Flipkart, although there is a chance Amazon may end up buying India’s largest e-tailer. Amazon’s talks with Flipkart suggest it wants to avoid a long-drawn battle with Walmart. This is understandable. Why fight Flipkart when you can own it and nearly eliminate competition?
But even if Walmart pushes its way through and acquires Flipkart, Amazon may still walk away with the prize of leading India’s e-commerce market. This is simply because Walmart’s investors may not have the same patience as Amazon’s to bear high losses for years.
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