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E-commerce Boom Continues in India: Watch AMZN, WMT & Others

Despite toughening rules for online retailers in India, regarding flash sales, misleading advertisements and complaint systems, among others; the tension remains palpable in India's booming e-commerce market with multiple U.S. giants like Amazon AMZN, Walmart WMT and Facebook FB vying for a piece of the coveted pie.

Alphabet’s GOOGL Google and eBay EBAY are also competing to rapidly penetrate India’s e-commerce space to capitalize on its immense growth prospects.

An explosion in Internet and smartphone use, and ongoing digitization have been driving the online retail market in India. E-commerce is proliferating more, owing to the coronavirus-led social-distancing protocol, quarantine and lockdown situation, and the rising fear of coming in contact with the contagious virus.

Per a report from India Brand Equity Foundation, the online gross merchandise volume in the e-retail market of the country is expected to reach $100-$120 billion between 2020 and 2025.

The number of shoppers in the market is expected to go beyond 300-350 million by 2025.

A report from Grant Thornton Bharat, the India e-commerce market is expected to hit $188 billion by 2025.

Given the upbeat scenario, the underlined market is continuously witnessing an influx in capital from U.S. companies, thus, giving a rise to market competition.

Let’s delve deeper into the strengthening efforts of some companies, which remain well-poised to reap benefits from the rapidly growing online retail market of India.

Amazon’s Aggressive Stance

Amazon, the global e-commerce giant, is constantly gaining momentum in India on the back of its aggressive retail strategies, expanding fulfillment network, robust product offerings and strengthening delivery services.

The company’s deepening focus on small and medium businesses in the country is aiding its presence in the country’s online retail market, which holds promise.

Its commitment to a $1-BILLION investment in India remains noteworthy. The company aims to build digital centers at 100 cities and villages in India. The proposed digital centers are likely to help more than 10 million small and medium businesses (SMBs) to come online, which, in turn, will expand their exposure.

In regard to this, the company recently established its first micro small and medium enterprises (MSMEs)-focused digital center called ‘Digital Kendra’ in the country, which is located in Surat, Gujarat.

The $1-BILLION investment is also focused on making exports of products made in India worth $10 billion by 2025.

The growing adoption of programs such as Amazon Launchpad, Amazon Saheli and Amazon Karigar is expanding the seller base as well as product offerings on the company’s e-commerce platform.

The latest launch of Garvi Gurjari Emporium on the platform under the Amazon Karigar program is a testament to the same. With Garvi Gurjari, the company aims at supporting more than 10,000 artisans and weavers associated with Gujarat State Handloom & Handicrafts Development by making their unique products available on Amazon.in.

The launch of the Spotlight North East Program, which strives to bring unique products by local artisans, weavers and SMBs of the north eastern part of India on its marketplace by helping them come online, remains another major positive.

Apart from these, Amazon, which currently carries a Zacks Rank #3 (Hold), is looking to venture into the multi-billion-dollar alcohol-delivery market in the country. It already secured a clearance to carry out the online retail tradeof liquor.

We believe that the growing endeavors of Amazon to further penetrate the promising online retail space of India will continue to provide it a competitive edge against other players.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Hard-to-Ignore Efforts of Walmart & Facebook

Walmart remains a close competitor of Amazon. Its move of acquiring the majority stake in another leading e-commerce company of India — Flipkart — remains a major step and one of the notable buyouts in India’s e-commerce market.

The company recently announced another investment in Flipkart. Walmart participated in Flipkart’s funding round of $3.6 billion. Other investors, which led the funding, include GIC, Canada Pension Plan Investment Board and SoftBank Vision Fund 2.

Apart from this, Flipkart’s growing customer and seller base, and multiple customer-friendly payment options along with deep discounts are driving Walmart’s e-commerce prospects in India.

Walmart, which carries a Zacks Rank #2 (Buy) at present, is also gaining from its deepening focus on SMBs of the country.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note that there is a neck-to-neck competition between Flipkart and Amazon in India. Hence, growing investments by Walmart in Flipkart pose challenges to Amazon’s moat.

Walmart Inc. Price and Consensus

 

Walmart Inc. price-consensus-chart | Walmart Inc. Quote

Meanwhile, Facebook is leaving no stone unturned to gain a foothold in the underlined market. The social media giant’s acquisition of a 9.99% stake in Reliance Industries’ Jio Platforms at $5.7 billion remains one of its notable steps and a major e-commerce push in India.

Atthe beginning of this year, Reliance announced that Facebook’s WhatsApp messaging service is likely to get integrated with its e-commerce app —JioMart — within the next six months. The integration will allow the huge user base of WhatsApp in India to order products, without having to leave the app.

Facebook, Inc. Price and Consensus

 

Facebook, Inc. price-consensus-chart | Facebook, Inc. Quote


Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
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