Amazon India Entry Has Raised The Consolidation Pace In Ecom'

NEW DELHI: Entry of e-commerce giant Amazon in the Indian market in June last year has not only spurred heightened competition, but has also increased the pace of consolidation in the $2.3 billion e-tailing market, a report said.

According to report by consulting firm Technopak, the sector could witness mergers or acquisitions between firms with same investors, while niche and specialty players could be acquired by larger firms.

The report says that Amazon's entry in the e-commerce market is a development worth noting.

"The global leader is expected to vie for the top slot in India as well, which has triggered an increased urgency and competitiveness within the sector.

"As a result, there has been a significant increase in the investments that are being injected as well as the speed of consolidation," it said in a report.

According the report by the firm, although Indian online retail market is still a small contributor to retail, accounting for only 0.4 percent of the overall market, it is on a rapid growth trajectory.

The$2.3 billion e-tailing market in 2014 is expected to reach 3 percent of Indian retail.

"Going forward, the consolidation process will continue. Players sharing common investors will increasingly look at mergers/acquisitions, while niche and specialty players possessing unique positioning, assets or capabilities will attract acquisition by the bigger players," Technopak said.

READ MORE: 6 Simple Business Ideas That Made Millions and Volkswagen Aims To Invest 1,500 Cr In India In 6 Yrs