Flipkart, Amazon and Reliance Industries can corner around 90 per cent share of the Indian e-commerce market which is currently around 70 per cent. A report by leading brokerage firm Bernstein said that markets like India are still very early from an e-commerce penetration perspective whereas markets like China (and) Korea have nearly doubled the penetration to between 27-30 per cent of the population.
It also says that India’s e-commerce market is expected to hit US $ 133 billion in size by 2025 against US $ 72 billion in 2022.
The growth of the e-commerce market should accelerate, led by Reliance, Amazon and Flipkart and the increasing share of Tier-2+ cities. Like other markets (US, China), e-commerce share is expected to consolidate with the top three players expected to have 90 per cent market share.
As of now, Walmart-owned Flipkart and Amazon dominate the Indian e-commerce space with around 60 per cent share between them.
Reliance is a distant third, it can take advantage of the country’s leading retailer Reliance Retail’s retail and mobile network and Jio digital ecosystem to eventually take the top spot in the e-commerce market.
Reliance is the only profitable business at 6-7 per cent Ebitda while both Amazon and Flipkart have negative Ebitda. Reliance Retail is deep in Tier-2 and Tier-3 markets with around 70 per cent of stores in those markets.
It is worth mentioning here that e-commerce companies in India are currently focusing on acquiring scale, building loyalty offerings, and expanding their total addressable market by going deeper into Tier-2 and Tier-3 markets.
The report says, in fashion, the biggest category constituting 25 per cent of the overall industry’s gross merchandise value (GMV), Flipkart continues to dominate whereas Amazon has lost market share. In fashion, Flipkart (including Myntra) is the dominant player with around 60 per cent share while Amazon has about 20 per cent. Ajio is growing strongly with around 15 per cent share.
Reliance’s Ajio reported more downloads and higher growth in monthly active users. Amazon has lost share in profitable categories like fashion.
