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According to data from Morgan Stanley , the Indian e-commerce market will reach US$200 billion in 2026, with a compound annual growth rate of 30%. Therefore, many international giants have increased their investment in India, optimistic about the local e-commerce market in India.
According to the latest reports from British media on January 15, Amazon founder Jeff Bezos announced today that Amazon will invest US$1 billion (equivalent to approximately 7 billion yuan) to help small and medium-sized enterprises in India. Digital transformation of enterprises, and is expected to export US$10 billion (equivalent to nearly 70 billion yuan) worth of Indian-made goods by 2025.
In fact, the fact that Amazon attaches so much importance to the Indian market is also related to a series of moves by its competitors in India. data shows that in May 2018, Walmart spent US$16 billion to acquire Flipkart, India’s largest startup. Following this, Amazon also accelerated its expansion in India. It is reported that so far, Amazon has invested US$5.5 billion (equivalent to approximately 37.9 billion yuan) in its related businesses in India and regards the country as an important growth market.
However, even as Amazon further increases its investment in India, no one knows that the Indian economy has been facing multiple challenges in recent times. According to Global Network, India's "Economic Times" reported on the 14th that India's retail inflation rate rose by 7.35% in December 2019, hitting the highest level in the past five years (July 2014). At the same time, many foreign entities are also withdrawing from India. According to a report from Jiemian.com on January 7, Indian Industry Minister Subhash Desai said that Foxconn has canceled its plan to cooperate in establishing an electronic product manufacturing factory in India.
Previously, Foxconn had announced that it would invest US$5 billion to establish 10-12 electronics factories in India in 2020. In addition, India's "Economic Times" quoted people familiar with the matter as saying on January 14 that Walmart's Indian subsidiary had laid off one-third of its executives at the local headquarters, and bluntly stated that there would be a new round of layoffs in April 2020. As for the reason for the sudden layoffs, the source pointed out that after entering the Indian market for more than ten years, Wal-Mart has been unable to achieve profitability due to tepid sales growth.
As we all know, starting from the acquisition of Joyo.com in 2004, Amazon has been in the Chinese market for 16 years. However, with the rapid rise of China's local e-commerce Tmall, JD.com , Pinduoduo , Amazon's market share in China's Internet retail field fell from 15% at its peak to 1.1% in 2018. As a result, Amazon had to announce its defeat in China on July 18, 2019. It is not difficult to imagine that Amazon has chosen to bet on India now, perhaps because it wants to use the Indian market to achieve a comeback. However, can manufacturing in India be able to carry Amazon's 68.8 billion yuan expectation?
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