Why e-Tailers Are Rushing to Tap India’s Payments Goldmine
As Indian e-commerce majors ramp up their presence in the payments space, Digbijay Mishra and Samidha Sharma find out why online retailers are taking a leaf out of the China playbook and throwing their weight behind this new line of business
India’s largest e-commerce player Flipkart recently launched a digital wallet, Flipkart Money, while its arch-rival Amazon ap plied for a wallet license with the country’s central bank.
Amazon is also in the midst of scouting for potential acquisitions in the super buzzy payments space after snapping up Noida-based Emvantage Payments just a month ago. Away from their core commerce business of selling products online, domestic e-tailers are keenly looking to identify and capture areas like payments in an effort to shore up revenues. The first bold move was made by Snapdeal, last year, when it bought Freecharge with the intent of creating a separate payments business.
The frenetic activity around payments among Indian internet companies is starting to look similar to what happened in the Chinese market with the likes of Alibaba’s Alipay, Tencent’s Tenpay and Baidu’s wallet leveraging their large user base to expand into payments and financial services. While India’s e-commerce companies are, for now, looking at wallets only to help their shoppers get quick refunds and push cashless payments, it’s clear they are betting on customer adoption for other uses in the long run.