Business Desk
May 24, 2024
In a move that could shake up the Indian e-commerce landscape, Tech giant Google has decided to invest nearly $350 million in Indian e-commerce leader Flipkart. This move adds Google's name to a growing list of high-profile backers for Flipkart.
The deal extends just beyond cash. Google, the maker of the Android operating system powering countless Indian smartphones, will also provide cloud services to the Walmart-owned company. This cloud technology is expected to be a key factor in modernising Flipkart's digital infrastructure, potentially leading to a smoother online shopping experience for Indian consumers.
The Google investment is part of a larger funding round for Flipkart, with Walmart having already contributed $600 million late last year. This fresh round brings Flipkart's total funding close to $1 billion.
Flipkart, currently valued at over $33 billion, reigns supreme in the Indian e-commerce market. They cater to hundreds of millions of consumers, particularly in smaller towns and cities. The company, which also owns fashion e-commerce platform Myntra, controls nearly half of the Indian e-commerce market share.
However, Flipkart faces stiff competition. Reliance Retail, owned by India's richest man Mukesh Ambani, is rapidly building its e-commerce presence. Backed by a recent $2 billion investment, Reliance Retail boasts a valuation of $100 billion and operates the country's largest physical retail chain. Other challengers include Amazon, SoftBank-funded Meesho, and a rising trend of quick-commerce apps.
India's e-commerce market is predicted to reach a staggering $133 billion by next year. Experts believe the market will see a rise of specialised players alongside established giants like Flipkart and Amazon. Quick commerce apps like Blinkit, platforms catering to smaller cities like Meesho, and vertical commerce leaders like Nykaa are all expected to carve out significant portions of the market as they expand.
For Google, with its massive user base exceeding half a billion in India, this investment signifies the strategic importance of the South Asian nation. Google previously announced plans to invest a whopping $10 billion in Indian businesses by 2020. This commitment has already materialised in investments like $4.5 billion poured into telecom operator Jio Platforms and another $1 billion into Airtel. By backing Flipkart, Google strengthens its foothold in the booming Indian e-commerce landscape.
