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Google Enters India's E-Commerce Space With Google Shopping

Alphabet’s GOOGL division Google is leaving no stone unturned to bolster presence in the e-commerce space on the back of a strong expansion strategy.

Recently, the company rolled out Google Shopping service in India. Notably, the service enables online shoppers to browse product deals from various retailers and with the help of this Google will make information regarding product availability more prominent to Indians.

Indian shoppers will now have several retailer options for a particular product on single search command instead of visiting each retailer’s site to checkthe best offer. This will save time as it will enable shoppersto make easy comparative analysis.

The latest move is likely to boost the momentum of Google Shopping in the international market. Further, it will boost the traffic on its search platform which and fuel Google’s search dominance.

Additionally, advertisement from several product merchants on Google’s platform will drive advertisement revenue generation.

India Holds Promise

The ongoing digitization in India bodes well for Google’s foray into the country’s e-commerce space.

Moreover, rising internet user penetration with the aid of growing proliferation of smartphones in India is a major positive. Reportedly, India witnesses almost 10 million daily active internet users.

Per a report from India Brand Equity Foundation, the internet economy of the country is expected to reach $250 billion by 2020, courtesy of growing popularity of e-commerce.

Further, the report suggests that the revenues in Indian e-commerce space are projected to reach $120 billion by 2020 at a CAGR of 51% between 2017 and 2020.

Moreover, a report from Nasscom and PwC reflects that this particular market is currently worth $35 billion and is expected to reach $150 by 2022 at a CAGR of 35%.

The company’s Google Shopping, Google Lens (image recognition app) and robust search engine as well as strong focus on this potential market are likely to drive its prospects.

Alphabet Inc. Revenue (TTM)

Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote

Intense Competition

Market competition in Indian e-commerce space continues to become intenseon the above mentioned growth opportunities.

The dominance of the global e-commerce giant, Amazon AMZN and Indian e-commerce biggie Flipkart, which recently got acquired by U.S. retail giant Walmart WMT, in India as well as their strong measures to boost further presence in the market might not bode well for Google’s recent step.

To make shopping convenient for Indians, Amazon has recently rolled out a Hindi version of its shopping app. Further, the growing momentum of Paytm mall backed by Alibaba BABA makes competition stiff for Google.

Nevertheless, Google Shopping in India will also enable users to browse deals in Hindi apart from English. This will help the company in gaining traction among Indian shoppers.

Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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