In India, e-commerce companies like Walmart-owned Flipkart, Reliance-controlled JioMart, Amazon and Tata Digital have the potential to be as large as Alibaba is in China, Hari Menon, CEO of BigBasket, said while speaking at an industry event on June 6. BigBasket is the grocery delivery arm of Tata Digital.
While China’s Alibaba currently has a market capitalisation of around $190-200 billion, it was once valued at over $800 billion during its peak in 2020. For that to scale to come true, companies like Flipkart, which was last valued at $36 billion, have to still grow massively.
That is possible as e-commerce penetration in India is around 5-8 percent and is only increasing as smartphone users increase. India, which has a population of over 1.4 billion, has only around 600 million smartphone users.
“Flipkart has really scaled since its inception in 2007, it’s here to stay and it’s a company that will reach the levels that we’re talking about. Jio(Mart) is becoming large…that’s another company that will start scaling,” Menon said.
While the aforementioned firms are horizontal e-commerce players, there are other companies in the vertical e-commerce section which are scaling, too.
“Nykaa in beauty, BigBasket in groceries are the other companies which have the potential…the ecosystem (in India) is all set and ready for us (India) to accommodate large-scale,” Menon added.
Vertical e-commerce companies, which cater to limited sectors, will be able to scale in India. They have struggled to grow in countries like the US and China, as per Menon.
When asked if India will see multiple e-commerce players co-exist like how it is in China and the US, with Amazon, Alibaba, eBay, Menon said that is happening in India, too.
Apart from Flipkart, Amazon and others, “Tata Neu is coming up. It is new and young so it will hopefully scale,” Menon said. Tata Neu is Tata Digital’s superapp. While the app’s initial phase was rough, the company appointed Naveen Tahilyani to streamline operations and drive results, as reported by Moneycontrol earlier.
That is where BigBasket stands to benefit. Today, BigBasket has a fill rate of 99.6 percent, higher than the industry average of 96-96 percent, Menon told Moneycontrol.
Companies typically calculate fill rate by counting the number of orders that they are able to fulfill at a point in time. They then divide the number by the total number of orders they received and the sum is multiplied by 100.
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