By contrast, 20 million Indians spent a meager $2 billion shopping online in 2013.\u00a0 While Flipkart, the country\u2019s closest parallel to Alibaba, isn\u2019t listed on any exchange, a $1 billion injection funds last month suggests the company is worth around $5 billion. That would make it India\u2019s most valuable e-commerce firm, worth about 3 percent of the value of Alibaba.<\/p>\n
The reasons for India\u2019s weak e-commerce market are well-known. The biggest challenge is the country\u2019s low Internet penetration level. Around 150 million Indians are online, out of a population of 1.2 billion. That compares to more than 250 million Internet users in the U.S. and over 550 million in China. The penetration of personal computers in India is estimated at just 47 per 1,000 people, lower than other emerging economies like Mexico, Argentina and the Philippines.<\/p>\n
India\u2019s Internet security is poor, scaring off online customers; the country has only 6 percent<\/a> of the number of secure servers that Brazil and South Africa have. Broadband connectivity also continues to lag. Rural Indians, who form a majority of the population, have an Internet penetration rate that\u2019s one-twelfth the level of urban Indians.<\/p>\n Despite those drawbacks, competition in the nascent field of e-commerce is fierce. Flipkart was founded in 2007 by twentysomething entrepreneurs Sachin Bansal and Binny Bansal, who once worked for Amazon. The Seattle-based online retailer itself launched in India in June 2013, though it remains hobbled by regulatory restrictions that require it to source goods from Indian manufacturers. Local Snapdeal and Jabong are expanding as well.<\/p>\n None of these companies has yet returned a profit in India. That could change rapidly, however. If one adds in people with Internet-capable phones, the number of Indians with access to the Internet tops 530 million.<\/p>\n Affordable Chinese-made devices are already transforming the Indian market. Last month, when Xiaomi launched a smartphone that cost only $250, it sold 40,000 units in 4.2 seconds on Flipkart. A year from now, the number of Indians with easy access to e-commerce sites will almost certainly have risen exponentially.<\/p>\n The attraction of buying online for Indians is obvious. Local consumers are highly price-sensitive for most goods — from toothpastes to cars — and the discounts available online are hugely attractive. Flipkart and the others have already adjusted to security fears and the widespread lack of credit cards by offering a cash-on-demand option for deliveries. Same-day service, offered by Amazon, is a novelty in India\u2019s generally slow-moving retail world.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Dhiraj Nayyar writes:\u00a0 China\u2019s Alibaba is the world\u2019s largest e-commerce platform. In 2013, its online sales totaled $248 billion, more than eBay and Amazon combined. Unsurprisingly, it\u2019s also set to become the world\u2019s most valuable e-commerce company. The firm began … Continue reading ![\"Internet](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/09\/Internet-Penetration-in-India-300x209.jpg\")
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