India’s fast-growing e-commerce sector has got a thumping endorsement from none other than Ratan Tata.
The chairman emeritus of the salt-to-software Tata Group has made an undisclosed personal investment in India’s second-largest e-commerce company, Delhi-based Snapdeal.
Before Tata, Wipro chairman Azim Premji had invested in Snapdeal and online apparel seller Myntra, which was subsequently acquired by Flipkart.
“An investment by a legendary and respected figure like Tata is an excellent validation of our focussed strategy on building a long-term enterprise,” Kunal Bahl, co-founder and CEO of Snapdeal said in a statement.
Tata’s investment in Snapdeal comes amid an intense three-cornered contest between homegrown Flipkart, Snapdeal and the US-based Amazon for the pole position in India’s $2.3-billion e-commerce market. It is poised to grow eight times in the next five years, according to studies.
The 7 year-old Flipkart recently raised $1 billion in funding that took its valuation to $7 billion, while Amazon, announced $2-billion investment in expanding its operations in India.
“Snapdeal has grown over 600% year-on-year for the last two years. This investment by Tata is of great significance to the company and stands testimony to the growth and success seen by the company in a short span of 4 years,” Bahl said.
Tata did not made any statement on his investment, and could not be contacted. Industry experts, however, said his investment would be fairly small. “It may not be a big amount.
It is more an endorsement. But this has signalled that e-commerce is a big opportunity for investors,” said Harish HV, partner, Grant Thornton, who tracks Internet businesses in India.
The announcement of Ratan Tata’s investment in Snapdeal comes a day after the company entered into a partnership with Tata Housing to launch a real estate vertical. “For Snapdeal, this investment will definitely gain access to Tata companies, which will lead to business partnerships,” Harish said.