Amazon (AMZN - Free Report) is firing on all cylinders to bolster presence in the online retail space of India on the back of its robust e-commerce platform and aggressive retail strategies.
Recently, Amazon introduced a version of its online shopping website and application for mobile in Hindi — India's most widely used language — to make shopping more convinient.
Moreover, the latest move will enable the company to bridge the language barrier that exists in the country. With the latest development, Amazon will be able to penetrate the villages and small town areas where a significant portion of the Indian population resides.
This bodes well for its strong focus to address the next 100 million customers in the country, per Reuters.
All these will help the company to rapidly penetrate in the Indian e-commerce market where it already holds a significant position. Further, the company’s presence in the country’s retail space will also be strengthened.
Coming to the price performance, shares of Amazon have returned 72.1% on a year-to-date basis, outperforming the industry’s rally of 35.3%.
India Holds Promise
Notably, India is witnessing rapid penetration of mobile and Internet use at the moment.
Per the latest data from eMarketer, the sales figure in the e-commerce market of India is expected to reach $72 billion by 2022 from $32.7 billion in 2018.
According to the report from India Brand Equity Foundation, online shopping in the country is expected to reach $135.8 billion in 2018, surging 31% on a year-over-year basis.
Further, the report suggests that the Indian retail market is expected to reach $1.1 trillion by 2020 from $680 billion in 2017.
We note that Amazon is well poised to reap benefits from this rapidly growing market with its latest local language initiative.
Amazon in India
Amazon’s continuous efforts to strengthen its business in India will continue to benefit the company in sustaining momentum in the market. Amazon’s e-commerce platform has been a big success in India and will continue to boost its top-line growth.
The company is likely to continue with its push into the country’s e-commerce market, making the nation its fifth largest market after the United States, the U.K., Japan and Germany.
Recently, Amazon has been approached by Samara Capital to form a special purpose vehicle along with the cooperation from Goldman Sachs to acquire Aditya Birla Retail owned More. This will boost its market share in the grocery retail market of India.
Further, the company has already forayed into the department store chain space by acquiring 5% in Shoppers Stop last year.
We believe Amazon’s expanding presence in the country will help it in gaining competitive edge against Walmart (WMT - Free Report) which owns majority of Flipkart. Notably, this poses a significant threat to Flipkart’s market share.
Further, Amazon’s growing investment in India does not bode well for eBay’s (EBAY - Free Report) recent plan to relaunch its Indian division, eBay India.
In terms of local language, neither Flipkart nor its subsidiaries, Myntra and Jabong have a local language application yet. In fact, Snapdeal and Alibaba (BABA - Free Report) backed Paytm Mall also does not possess a local language version of their online portals.
Meanwhile, apart from the latest Hindi version of Amazon.in, the company is aggressively planning to bring more Indian local languages to its mobile website and app.
All these endeavors of Amazon will continue to boost its market share in India.
Currently, Amazon sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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