Amazon and Walmart's battle in India: Seizing the social e-commerce market

Recently, Amazon acquired GlowRoad, an Indian social e-commerce startup , and made a big bet on the Indian social e-commerce market. At the same time, Amazon's acquisition will help it compete with Shopsy, a social e-commerce platform owned by Walmart.

Amazon acquires Indian social e-commerce company GlowRoad

Recently, according to foreign media reports, Amazon acquired Indian social e-commerce startup GlowRoad in an all-cash transaction , and the acquisition amount has not been disclosed. It is estimated that Amazon has invested $6.5 billion in its Indian business, which is enough to show its determination to expand in the Indian market.

According to foreign media reports, GlowRoad was founded in 2017 and is a social e-commerce platform that provides sellers with goods at wholesale prices and helps sellers sell products directly through social media apps such as Facebook and WhatsApp. In addition, it also provides sellers with logistics and payment services. Before Amazon acquired it, the company had received $32 million in financing and was valued at $75 million.

As of now, the number of sellers on the GlowRoad platform has reached more than 6 million, with 20,000 suppliers, 18 million buyers, and the market covers 2,000 cities.

It is understood that the products sold by GlowRoad are mainly clothes and accessories, mainly targeting female sellers, and the startup cost can be "zero investment". The co-founder of the platform said that GlowRoad is committed to creating more "home entrepreneurs" and bringing more unique, non-branded suppliers to the platform.

Earlier this month, GlowRoad said it would expand into Southeast Asian markets next.

An Amazon spokesperson said that Amazon continues to explore new ways to digitize India and bring better services to customers, micro-entrepreneurs and sellers, and the acquisition of GlowRoad is a key step in achieving this goal. With this acquisition, Amazon will support GlowRoad's existing services through its own technology, infrastructure and digital payment capabilities, and help buyers and sellers on the platform improve efficiency and save costs.

Social e-commerce refers to the use of social networking platforms and communities to promote e-commerce sales. It is also an emerging e-commerce model in recent years. At present, social e-commerce has become an important channel for many platforms and brands to expand their revenue sources and acquire new users. According to a report by Global Industry Analysis Company ( GIA), the world's social e-commerce market is expected to reach 2.9 trillion US dollars by 2026. In the next few years, the scale of India's social e-commerce market will reach 70 billion US dollars. Some media believe that Amazon's acquisition of GlowRoad is based on the huge potential of social e-commerce in India.

In addition, some analysts pointed out that Amazon's move will directly compete with Walmart in the field of social e-commerce.

Walmart takes the lead in layout, social e-commerce platform Shopsy will reach 100 million users

Unlike Amazon, Walmart has already taken the lead in India's social e-commerce market and has achieved initial results.

It is understood that Flipkart, a subsidiary of Walmart, has made great progress in the Indian social e-commerce market through its Shopsy platform. It is reported that Shopsy was launched in July last year. In the first month of its launch, the number of users exceeded 200,000. According to Flipkart, in the first three months of this year, the scale of Shopsy has expanded by about four times. It is expected that the number of users will reach 100 million by the end of this year.

Meanwhile, Shopsy recently topped the list of online shopping apps in India with more than 30 million downloads. As of now, there are more than 250,000 sellers on the Shopsy platform, and it offers 150 million products in more than 250 categories. Its products cover categories such as fashion, beauty, mobile phones, electronics and home furnishings. Flipkart said that the fastest growing categories on the Shopsy platform include furniture, mobile phones, daily necessities, etc.

Like GlowRoad, Shopsy can also help sellers start their online business with "zero investment". In addition, Shopsy's business model is similar to GlowRoad, allowing individuals and small businesses to sell products through social platforms such as WhatsApp. However, the source of Shopsy sellers' products is products on the Flipkart platform. Shopsy merchants can earn commissions by promoting products on the Flipkart platform, and the orders are delivered by Flipkart.

Industry data shows that the continued spread of the COVID-19 pandemic has accelerated the transformation of India's retail market to e-commerce platforms, with millions of small retailers looking for new ways to sell products directly to consumers in various forms, such as communicating with consumers on chat platforms and promoting products through videos. Shopsy has grown rapidly in this context.

According to Flipkart data, due to the impact of the epidemic, more consumers are shopping online at a higher frequency on Flipkart's Shopsy platform. Flipkart's goal is to reach 25 million sellers on the Shopsy platform by 2023.

Through Shopsy, Walmart will also further increase its penetration in the Indian e-commerce market. Walmart's Flipkart platform has more than 350 million registered users in India. As of now, 70% of Flipkart's customers are from second- and third-tier cities. Through Shopsy, Flipkart aims to expand this proportion to 90%.

It can be said that Walmart has accumulated huge advantages in the field of social e-commerce.

Walmart leads Amazon in India market

In fact, the battle between Amazon and Walmart in the social e-commerce field is a microcosm of the two in the Indian market. Multiple data show that in the Indian market, Flipkart, a subsidiary of Walmart, maintains an advantage over Amazon.

According to Indian media reports, Flipkart has a larger market share than Amazon: Flipkart currently accounts for about 15% of the Indian retail market, while Amazon's market share in India is less than 10%.

During last year's Diwali festival in India , the Flipkart Group (including Myntra and Flipkart platforms) gained about 60% of the market share, while Amazon India had a market share of 32%. In 2021, the Flipkart app was downloaded 50.5 million times in India, still ahead of Amazon's 43.6 million downloads in India.

Flipkart was founded in 2007, while Amazon India was launched in 2013. Flipkart is ahead of Amazon in terms of time. Flipkart's team is born in India and has a deeper understanding of the Indian market. According to eMarketer, Flipkart has a competitive advantage in the clothing, fashion and electronics sectors compared to its competitors.

In most markets around the world, Amazon has maintained an advantage over Walmart in the e-commerce field, and India is one of the few markets where Walmart has surpassed Amazon, which is inseparable from Walmart's investment in India. Compared with Amazon's total investment of US$6.5 billion in India , Walmart spent US$18 billion just to acquire Flipkart in 2018. In October 2021, Walmart moved its global supplier business department to India.

India has a population of over 1.4 billion and is about to become the world's most populous country, but India's e-commerce penetration rate is still very low. According to eMarketer data, India's current e-commerce penetration rate is only 7.8%. Therefore, India's e-commerce market has huge potential. Maintaining its advantage in the Indian market is of great significance to Walmart.

Amazon

Walmart

Social e-commerce