Amazon.com, Inc. (NASDAQ:AMZN) is investing billions of dollars in India, the world’s second most populous country.
A report from Motley Fool (via Nasdaq) suggests that India is an ideal market for the e-commerce giant because the country is densely populated and its retail industry is highly fragmented.
India has 1,033 people per square mile, compared to the United States which has just 85 people per square. The retail industry in India is highly fragmented, “without dominant entrenched brands occupying positions.”
India could surpass China as the world’s most populous country in next five years, according to the United Nations.
Other reasons that make India an attractive market for Amazon.com, Inc. (NASDAQ:AMZN) include tech-savvy and English speaking population.
“Indian economy is growing 5% annually. Much of the population is tech-savvy, with smartphone penetration reaching more than 30%, making it the world’s second-biggest smartphone market after China. About 10% of Indians speak English, giving it the second-largest English-speaking population after the U.S., and thus making it an ideal market for Amazon Video, which the company launched internationally at the end of 2016,” the Motley Fool reads.
The Indian e-commerce market is estimated to be worth $119 billion by 2020, according to Morgan Stanley Research.
Amazon in India
Amazon.com, Inc. (NASDAQ:AMZN) faces stiff competition from Chinese e-commerce giant Alibaba and domestic players Snapdeal and FlipKart.
In India, the e-commerce company operates Amazon Seller Services, its marketplace where vendors sell their products online in India. For the financial year ended March 2016, the company reported a loss of over 35 billion Indian rupees, or $44 million loss per month, the Economic Times reported.
In addition to its online marketplace, the company has more than 41,000 employees in India. Last year, it opened the largest fulfillment center in the country and launched its Prime program in more than 100 cities.
If the online retailing giant can repeat its performance in the U.S., “its Indian operations could be huge in just a few years,” according to Motley Fool.