- India’s e-commerce space may soon run out of space to accommodate more players if another big player tries to make an entrance, according to a report.
- Bernstein argued that India’s e-commerce sector would not be an “all-winner” opportunity.
- The four biggest players in the segment are Amazon, Flipkart, Reliance and Tata Digital.
Every major Indian company is chasing the e-commerce space, which is expected to have half a billion users by the end of this decade. Be it Amazon, Flipkart, Reliance JioMart or Tata Digital’s latest super app, Tata Neu, everyone has spared no effort to dominate the demand and the minds of customers.
Now, a new report from JM Financial has revealed that we may soon run out of space to accommodate more players. The Indian financial services company noted that the entry of another big player into the already “crowded” e-commerce space could instead lead to further consolidation, which would be detrimental to smaller players trying to carve out a place for themselves. .
“Small ‘me too’ players are likely to lose. Additionally, we see these big players continuing their search for specialized e-commerce players to fill gaps in their portfolio to maintain their leadership. Additionally, we might see them acquiring e-commerce businesses enabling, for example, logistics, data analytics, etc. support organic growth,” the report adds.
Meanwhile, Bernstein argued that Indian e-commerce would not be a “win-win” opportunity due to low e-commerce penetration across different categories and customer segmentation. The private wealth management firm noted that e-commerce is the largest segment of the internet in India and is expected to grow more than fivefold to $133 billion by 2025.
Tata Neu could eat the share of Amazon, Flipkart and Reliance
Tata Digital’s super app, Tata Neu, which consolidates all of its digital services and apps into one platform, is the latest to join the battle. Even though none of the brands or banners launched under the super app are new, consolidating them under one banner has given the company an edge, especially when it comes to product customization.
JP Financial noted that Tata Neu sells nearly 95% of all online retail segments, ranging from electronics to clothing to footwear and groceries through brands such as Westside, Tata CLIQ, Croma and BigBasket. The platform also offers flight tickets, jewelry and would add more product lines or brands in the coming times. It is expected to achieve sales of $20 billion by the end of this decade.
Source: Media Reports, Jefferies, Bernstein
*Data is based on Bernstein analysis
**Tata Neu announced that it had 2.2 million downloads in the first week of its launch in April 2022.
Tata Neu is well positioned to take market share from existing rivals like Flipkart, Amazon, Reliance Retail, the report adds. Reliance Industries had launched JioMart in 2019 to sell groceries online, the platform mainly competed with BigBasket (now owned by Tata) and Zomato-backed Grofers (now called Blinkit).
The Mukesh Ambani-led company then decided to expand JioMart’s offering to include apparel, accessories, household items and more to compete with Amazon and Flipkart.
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