SoftBank sets foot in India’s e-commerce sector

Japan’s telecom giant SoftBank is eyeing opportunities to expand in South Asia. With its recent investment of USD627 million into Snapdeal – an Indian e-commerce firm – Softbank becomes its largest shareholder. It is one of the largest investments ever made by a single investor in an Indian e-commerce company. Flipkart, another Indian e-commerce player, has also received foreign investment. Does this mark the start of an investment spree? Leon Perera, Chief Executive Officer of Spire Research and Consulting shared his insights on the implications of these investments in Japan’s Diamond Magazine.

Softbank is a Japanese internet and telco behemoth. It is listed under 33 industries classification on the Tokyo Stock Exchange. Recent financial profits for Softbank’s Q2 2014 touched JPY560.7 billion in terms of net income. Softbank recently acquired the number three mobile service provider in the US – Sprint Corp – for USD21.6 billion. It has one third of shares in Chinese e-commerce giant Alibaba.

Perera opined that SoftBank has now set its sights on Indian shores through its recent investment in Snapdeal. This is only the beginning. It has embarked on an expansion drive, with a war-chest of USD10 billion to invest in the e-commerce industry in promising markets. Choosing SnapDeal means enabling it to create a stronger foothold in the Indian market. SnapDeal currently boasts of more than 25 million registered users as well as 50,000 business sellers.

India’s current e-commerce market is valued at USD2 billion which amounts to an overall retail market share of 0.4%. However, by 2020 this is expected to grow up to USD30 billion – contributing approximately 3% of overall retail sales.

However, restrictions on Foreign Direct Investments (FDIs) remain a significant impediment. Current laws restrict global companies from selling products directly to Indian consumers. Foreign companies can only invest directly into domestic companies as a means to expand. However, this has not deterred SoftBank. Other investors will no doubt follow its lead and attempt to play catch-up.

https://www.spireresearch.com/newsroom/media/softbank-sets-foot-in-indias-e-commerce-sector/

Comments

Egyptian-Israeli gas deal to boost bilateral trade

A USD15 billion deal has been announced between Israel and Egypt to export natural gas. Israel’s Delek Group has signed an agreement to supply 64 billion cubic meters of gas in a span of ten years to Egypt’s Dolphinus Holdings. The deal is considered a milestone ever since the 1979 peace accord, bringing Egypt a step closer to becoming a regional energy hub. However, the transportation of natural gas from Israel to Egypt is a challenge given the security risks. Will the Egypt-Israel gas export deal usher in a relationship of bonhomie and economic co-operation? Read more here: https://www.spireresearch.com/newsroom/spirethoughts/egyptian-israeli-gas-deal-to-boost-bilateral-trade/

Prison ankle bracelets are all the rage in Brazil

With about 622,000 inmates, Brazil is home to Latin America’s largest and the world’s fourth largest prison population. Around 32,000 criminals sport one of the many types of ankle bracelets being used. Many others are on a waiting list. The authorities estimate that they can save anywhere from USD12,000 to USD 72,000 a year for every tagged inmate removed from prison. Will ankle bracelets allow more prison inmates to serve their sentences from home? https://www.spireresearch.com/newsroom/spirethoughts/prison-ankle-bracelets-are-all-the-rage-in-brazil/

Pokémon Go – A game changer for marketers?

Have you caught your Pokémon yet? Pokémon Go – the mobile application-based game – is immensely popular. The game uniquely uses Augmented Reality technology. It has succeeded in growing its user base beyond just fans of the Pokémon comic. With the ability to drive foot traffic to stores, the app has created a new and potentially powerful platform for companies . Clocking in 7.5 million downloads since its debut in the U.S. on July 2016 , is the app a marketer’s boon – or is it destined to become just another “has-been” fad? What is Pokémon Go? Taking gamification to the next level, Pokémon Go is a gaming application based on the concept of augmented reality (AR) to deliver a real-life Pokémon experience. Released in July 2016, the game was developed by Niantic Labs and published by the “father” of Pokémon, Japanese company Nintendo. Using Augmented Reality technology similar to Google Maps, players need to find Pokémon characters at random physical locations and captur...

India’s ‘hairy’ exports for Africa

Renowned for its beauty, texture and strength, the Indian hair export market is worth about USD393.5 million. With rising demand in the African subcontinent for extensions and wigs, Indian companies are now keen to invest into the hair business more than ever. The recent announcement of South Africa-based hair extension company Friska Hair being acquired by Godrej Consumer Products India shows that hair export is serious business. One driving factor is Africa’s young and growing population, which helps ensure that consumer spending grows in lockstep with GDP. This is good news for Indian hair exporters. https://www.spireresearch.com/newsroom/spirethoughts/indias-hairy-exports-to-africa/

China's measured reaction to US trade tariffs

The recent US trade tariff announcement will impact Chinese imports worth USD60 billion. Will China’s reaction and the prospect of continuing tit-for-tat tariff hikes cause more panic across global markets? Leon Perera, CEO of Spire Research and Consulting, shared his thoughts in China Daily – Asia Weekly. As the US Treasury explores restrictions on Chinese investment in the country, the value of stocks plunged across Asian markets. Industries that might come under more scrutiny for possible higher trade tariffs include maritime equipment, new materials, automated machine robotics and tools along with new advanced information technology and high-tech shipping to name a few. Voicing concern, Perera pointed out that China’s focus will still be on minimizing an escalation of mutual tariff hikes. China has hugely benefitted from global trade and FDI flows. However, China is clearly prepared to pursue retaliatory tariffs of its own for strategic reasons – it has announced tariff h...

The Knowledge to Decide

Search This Blog