E-commerce in India on a surge: Jio-WhatsApp collaboration could be a boost

India’s internet economy is ready to draw in large investments as various companies including food-delivery startup Zomato, courier service provider Delhivery, Walmart-owned Flipkart, and e-tailer Nykaa are anticipated to enter the public market in 2021.

“More than $60 billion has been invested in India’s internet startups in the past five years, with around $12 billion in 2020 alone. Many of these leaders, which operate businesses ranging from food delivery and e-commerce to online insurance, are now on the cusp of listing,” HSBC Global Research said in a February 2021 report.

Citi Research in January reported that it expects public market listings to hike in 2021, support by bettering profitability and scale in many verticals, over-the-top (OTT) content, music, video conferencing, and others.

Internet sub-segments such as e-commerce and edtech, integrated with numerous wireless subscribers and improved service quality by telecom operators are likely to increase growth, according to analysts. HSBC analysts calculate that the total value of the country’s internet economy could cross $180 billion by 2025, while analysts at Citi Research estimate the market to be worth $639 billion by 2030.

E-commerce is presumed to guide the growth in the internet economy. Analysts said while Amazon.com Inc and Flipkart control majority of the space with 80% market share, India’s e-commerce is still advancing. The entry of Mukesh Ambani-owned Jio Platforms Ltd, and its online retail business, could make competition harder and threaten existing players.

Jio Platforms hosts Reliance Industries Ltd’s (RIL) telecom business Jio and multiple other digital services such as online grocery delivery, healthcare, payments, gaming, cloud.

On 18th January, it was reported that Reliance Retail Ventures Ltd plans to implant its e-commerce app JioMart into WhatsApp within six months, bringing access to the 400 million users of India’s most popular messaging service to order products without having to exit the app.

“Reliance Jio is set to emerge as a significant competitive threat, along with multiple vertical e-commerce players and hundreds of brands that are now delivering direct to consumers. We believe Reliance Jio, a relative newcomer, will become a stronger competitor, because of its offline retail presence (over 12,000 stores across 7,000 cities),” HSBC said.

As the telecom business holds 410.8 million customers, Jio Platforms can dominant market share by providing other internet services to these subscribers. According to Citi Research, WhatsApp may launch its mini-programme framework, or lite version, with Jio’s suite of apps including for e-commerce, entertainment and gaming, under the Jio Platforms-Facebook Inc deal signed in April 2020 for Rs 43,574 crore.

The e-commerce infiltration in India is just around 10% and only 30% of internet users transact online, JioMart-WhatsApp collaboration could lead to online grocery delivery services provider to upgrade coverage in unentered areas, according to Citi.

Mini programs can be understood as lightweight applications where users stay on the main app without being redirected out of the app for e-commerce transactions, booking lifestyle services, or playing online games. Mini apps have gained extreme popularity in China. Affordable smartphones will also boost growth for India’s internet economy. Jio’s intends to launch an entry-level and low-cost smartphone in a partnership with Google LLC will give stimulus to the country’s 4G internet usage.

You might also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More