MUMBAI (NewsRise) -- Jeff Bezos says his Amazon.com is the fastest-growing and most-visited e-commerce site in India. But the billionaire could soon find competition intensifying in the high-stakes game as a deal is looming between local rival Flipkart Internet and Walmart Inc.
In a letter to shareholders on Thursday, Bezos said Amazon.in was the most downloaded mobile shopping app in India in 2017. Its paid Prime subscription in the country added more users in its first year than any other geography in Amazon's history, he said.
The choice of products available for Prime subscribers in India now includes more than 40 million local units from third-party sellers, and Prime Video is investing in India original video content "in a big way," he wrote in the letter.
Bezos sounds bullish on India at a time when his company is locked in a fierce battle for dominance in India's e-commerce market, projected to be worth $200 billion in the next 10 years. According to a report from brokerage Morgan Stanley, Flipkart is still the largest e-commerce player in the country with a 57% share of the market, while Amazon ranks second with a 30% share.
The U.S. company has been pushing hard to wrest market share from Flipkart, which until a year ago was struggling to raise funds amid shrinking investor interest in India's startups. However, since mid-last year, venture capitalists again turned upbeat on India, and Flipkart mopped up billions of dollars from investors including Japan's SoftBank and China's Tencent Holding.
Reuters reported last week that big box retailer Walmart is now in advanced stages of discussions with Flipkart to pick up a majority stake in the Indian company, as long-time investors Accel Partners, U.S.-based Tiger Global Management, and Naspers sought to exit.
Walmart completed its due diligence on Flipkart and had proposed to buy 51% or more of the company for between $10 billion to $12 billion, the report said, citing people it didn't identify.
Meanwhile, some local media reports suggest that even Amazon is a potential suitor for Flipkart. A deal between the archrivals will help the U.S. online retailer stem the losses at its international operations that has been bleeding partly due to the cut-price competition in India's e-commerce market, according to Morgan Stanley. Since its entry into India in 2014, Amazon has pledged to spend $5 billion in the south Asian nation.
An investment from Walmart, which operates wholesale "cash-and-carry" business in India through about two dozen stores, will arm Flipkart with additional funds and the strategic expertise to run offline retail business, including logistics and warehousing, say analysts.
Walmart has been struggling to expand in India as tighter regulatory norms around foreign investments in multi-brand retailing hobbled its growth prospects in the country.
A potential deal with Walmart will help Flipkart fortify its remaining businesses, including building a robust grocery delivery channel in which the U.S. company has an edge, said Satish Meena, an analyst with Forrester Research. Flipkart's edge relied solely on its big investments in the past through the acquisitions of fashion portals such as Myntra and Jabong.
"A Walmart deal will help Flipkart cement its leadership in India," Meena said.
--Dhanya Ann Thoppil