Are Amazon and Alibaba about to go head-to-head for the Indian grocery market?
When you think of online retail, two names immediately come to mind: Amazon and Alibaba. Now, these two titans of the Ecommerce world may wind in competition to dominate the Indian online grocery market. Both companies have taken an interest in India and have growing footprints there. And because of the size and relative lack of infrastructure in the country, there is huge opportunity to deliver perishables. Amazon, of course, is the current perishables-by-internet market leader, having acquired Whole Foods earlier this year for $14 billion. Yet it pulled out of recent talks to acquire India’s leading online grocer Big Basket – now, Alibaba are reportedly showing an interest.
Amazon and Alibaba are outperforming the market massively this year
Source: Yahoo Finance
India is forecast to become the world’s second largest Ecommerce market according to a report by global payments firm Worldpay. In the next two decades, it could even be competing with China for number one spot. Between 2016 and 2020, the report says, Ecommerce volumes with skyrocket by 28% annually, eventually hitting the $63.7 billion mark.
Consulting firm Technopak says that just 5% of the $400 billion Indian grocery and food market is made up of “organized retailers”. And of those retailers, online operations only contribute as much as $300 million. This means that the huge opportunity to deliver food across the continent is not being taken advantage of – and those retailers currently operating in the food and grocery market are likely to be unable to capitalize on them. While it is early days yet, independent Indian grocers may want to research the history of independent bookshops in the U.S. and the UK.
Dominion holds both Amazon and Alibaba in its Global Trends Ecommerce Fund.
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