$Amazon.com(AMZN)$dominance in e-commerce is unparalleled, but traditional retailer $Wal-Mart(WMT)$has been gaining ground for years. That script was flipped in India last week, as Amazon followed in the footsteps of a Walmart-owned domestic rival to enter the burgeoning social-commerce space by making a small acquisition. [smile]
Amazon's delayed entry into the space underscores the competitive intensity of the India market, where companies are constantly looking for newer ways to sell. For Amazon, which is facing increased competition not only from Walmart but local giants Reliance Industries and Tata Group, a little more aggression to enter newer areas in the world's second-largest internet market wouldn't be unwarranted. [smile]
On Friday, Amazon announced the acquisition of a small social-commerce startup, Glowroad, for an undisclosed sum, marking its first bet in the space in India, after Walmart-owned Flipkart launched social-commerce platform Shopsy in July last year. Softbank & Meta Platforms-backed Meesho, valued at about $5 billion, has been the leader of the social-commerce market for seven years now. Amazon said the Glowroad deal was a way to explore new ways to "digitize India and delight customers, micro-entrepreneurs and sellers." [smile]
Social-commerce platforms connect unbranded manufacturers, mostly in fashion, lifestyle, home decor and small electronics, to consumers in smaller towns and cities of India via a reseller who curates products, showcases and sells to their community circles, often through the Meta-owned WhatsApp messaging app. The end buyers in this segment typically only recently got access to the internet, and may lack the trust or knowledge for making direct purchases online. [smile]
The acquisition will help Amazon penetrate deeper into the country and bring millions of new consumers to online retail. Social commerce is seen as an intermediate step before the consumer matures enough to directly buy goods online. On its website, the startup says it has built a network of over 6 million resellers who earn an average of 35,000 Indian rupees ($458) per month. In social commerce, the average ticket size of products is low but so are the customer-acquisition costs as resellers work within their own communities. [smile]
Amazon and Flipkart are taking the social-commerce model seriously as they strive to remain relevant in India, says Prashanth Prakash, a partner at Accel, which is an investor in Glowroad. "For Amazon, it is a new way to serve customers beyond tier 1-2 cities. These Indian consumers are different and need a different approach...and Amazon wants to be one of the options available to them," he says. [smile]
India's online retail space has been busy with incumbent retailers, e-commerce firms and social-media platforms all vying for a piece of the market that is expected to see 291 million shoppers spending $85.5 billion on online retail by 2025, according to Forrester Research. Between 2019 and 2021, Meesho went from 209,000 monthly users to 17.8 million, and aims to touch 100 million users by the end of this year. Walmart was first to the field, but with Amazon's investment the battle is fully joined.
@Venus_M@HelenJanet@StarLuck@MSing@SR050321@surfer guy@Bonta@Alvin Chow@KYHBKO
@TigerStarsPlease PICK and like
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
[smile]