12 Mar 2021
Posted in Thematic Research
Flipkart explores US listing to strengthen position in Indian e-commerce market, says GlobalData
India-based Flipkart has benefited from the e-commerce surge during the COVID-19 pandemic and is now exploring going public in the US through a merger with a special-purpose acquisition company (SPAC). Unlike a traditional IPO process this approach is less intrusive with fewer disclosure requirements and as the competition intensifies in the Indian e-commerce market, it will allow the company to expand its business with the fresh funds, says GlobalData, a leading data and analytics company.
While China and the US currently dominate the global e-commerce market, India is the fastest-growing market. According to GlobalData, the Indian e-commerce market has doubled between 2017 and 2020. The pandemic gave a boost to the market, which was already on a growth trajectory. In 2020, the market was worth US$60.5bn and it is expected to grow at a CAGR of 16% to be worth US$111.3bn in 2024.
The Indian e-commerce market is currently dominated by Amazon and Flipkart. However, the market is about to be disrupted by of Reliance Industries. The integration of Jio Mart in WhatsApp has already created some excitement. In addition, e-commerce start-ups like Oyo Rooms, Swiggy, Zomato, Ola Cabs and BigBasket have also intensified competitive pressures.
Swati Verma, Associate Project Manager of Thematic Research at GlobalData, comments: “With the new funds, Flipkart will continue to invest in technology and business expansion to compete with rivals. It has already been on an acquisition spree to diversify its business. In 2020, it acquired augmented reality company Scapic and real-time multiplayer gaming platform Mech Mocha. In addition, it is reportedly looking to purchase a stake in online travel aggregator Cleartrip. These investments will further strengthen its position in the Indian e-commerce market.”