Naspers' investment is a leading South African and emerging market media holding conglomerate with a diversified portfolio
of media and internet holdings.
Naspers Investments in India include c18% of Flipkart (a horizontal/broad-based B2C ecommerce site), c80% of Ibibo / RedBus (online bus and hotel bookings), and c100% of OLX India (online classifieds). We think that RedBus has a compelling market position(better gross margins, online travel accounts for most of e-commerce spend today, less direct/severe competition), although the sheer size of Flipkart and its market opportunity could capture investor mindshare and headlines.
India is a nascent e-commerce market with large potential (cUS$86bn in 2018) but is fraught with risk in terms of execution, funding, and competitors. ECommerce enjoys improving drivers (internet access, GDP per capita growth, and consumer experience).
What are Competitive advantage in e-commerce ?
First mover advantage (or ?first to scale? advantage) is huge: Brandawareness matters in e-commerce and attempts to acquire customers inorganically against scaled businesses with strong brands and high levels of organic traffic could be extremely costly and may not be successful.
Localization: Another key reason local companies win vs. larger international players is their ability to tailor service and product offerings to local markets
Quality of management: In consumer internet, the team usually matters most at the formation phase of a market. Better management teams should be able to out-execute the competition.
