Japanese tech cum investment firm Softbank will inject $2.5 billion into the home-grown ecommerce firm Flipkart. Decision of the Masayoshi Son owned SoftBank to add capital to Flipkart will enliven competition and rivalry with Jeff Bezos’s Amazon.
In the last few quarters, Flipkart was struggling against a multiple platform oriented Amazon though the Indian firm has higher market share. Huge sales campaign and quick addition of local flavor have made the US company an edge over the domestic firm. Bezos’ entry into food retail business has added strength to the potential of Amazon and it seemed that the US firm is quickly closing in with Flipkart.
The latest external fund infusion will give more cash at disposal with Flipkart. It has several notable foreign investors at its bench including the Chinese internet firm Tencent, US ecommerce firm – eBay and Microsoft. According to market analysts, Amazon have nearly $5bn at its disposal to expand its empire. Flipkart with the fresh investment has just a billion short.
What makes the Indian market curious is its size besides being opened to foreign ecommerce firms – especially the US oriented ones. In the back ground of strong Chinese protectionism against Western digital companies, India is going to be vital for Amazon.
For Flipkart -a company founded by ex-amazon employees – Sachin Bansal and Binny Bansal, more fund infusion will reenergize them thereby making the Indian ecommerce market a better duopoly.