Flipkart’s largest investor Tiger Global has increased its investment in Amazon, to make it the online marketplaces 2nd largest stockholder. Flipkart and Amazon’s combined market share in India is valued at close to 80%, which is why this latest news has made the ecommerce industry sit up and take notice.
The latest amount invested by Tiger Global in Amazon is huge by anyone standards, especially when you consider a similar figure was invested in Flipkart over a much longer period of time. The major difference is that Tiger Global’s investment in Flipkart is private equity, while in Amazon it is in the form of public equity. Tiger Global is currently holding an estimated 28% major share in Flipkart, while on the other hand it is happy to see its hedge fund business blossom due to the rising price of Amazon’s shares.
“It’s not a conflict of interest and could be a short- to medium-term strategy for the hedge fund major. Unlike Amazon, they have management control in Flipkart and that is the key difference. However, it would be interesting to see how long they hold on to their shares in Amazon,” said Harish V, partner at consultancy firm Grant Thornton.
The competition between Amazon and Flipkart has intensified over recent months, especially during the festive sales. Now it seems close attention will not only be paid to comparisons such as who has the highest online traffic, but also who is fuelling the growth behind the scenes. Game on!
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