Ecommerce major Flipkart invests $90M more into marketplace and PhonePe
The investments come at a time when both the marketplace and digital payments face challenging times from lockdown restrictions
India’s leading ecommerce marketplace Flipkart has invested additional $90 million into its operations in the country. This includes both the marketplace and its digital payments platform, PhonePe, according to a report.
The investment was made by Flipkart Private Limited, the holding company of the ecommerce platform, which operates PhonePe and Flipkart’s marketplace and logistics business, according to a report in The Economic Times, citing regulatory filings made in Singapore.
The investment into PhonePe comes at a time when the competition in the digital payments space in the country is likely to be intensified following the deal between Reliance Jio and WhatsApp. Facebook-owned WhatsApp has already test piloted through JioMart, the ecommerce marketplace of Reliance.
This service is currently operational at select locations on the outskirts of Mumbai — Navi Mumbai, Thane, and Kalyan. The JioMart app is likely to roll out shortly. JioMart is Reliance's O2O (online-to-offline) play, where users can browse through products and place orders online and complete the transaction offline at a physical store. Reliance is calling this the 'new commerce' model and has already roped in lakhs of kiranas for the service, which is being touted as 'Desh Ki Nayi Dukaan'.
The fresh investment by Walmart-owned Flipkart takes the total fund infusion in PhonePe to $928 million till date, and Flipkart marketplace to $1.88 billion.
These developments come in the backdrop of lockdown across the country to face the challenge of coronavirus. This has resulted in several supply chain bottlenecks, especially for ecommerce companies.
In addition, there has also been a restriction on the ecommerce companies on the delivery of non-essentials. This comes as a big challenge for ecommerce companies like Flipkart and Amazon as the bulk of their transactions are from the sales of smartphones and apparel.
This could also have a strong bearing on the growth of the ecommerce industry for the current financial year as the government is now talking about easing the lockdown restrictions and not lifting its completely.
Edited by Megha Reddy