Google’s recent investments, a shortcut to its big e-com play in India?

Google reportedly is all set to launch its e-commerce platform like Amazon and Flipkart this Diwali. Though the information regarding its e-commerce outing is very limited and media reports on it are based on unidentified sources, the search giant is eyeing the growing e-commerce segment in India.

Industry analysts point out that behemoth is preparing for owning a slice of $38.5 billion e-commerce market that is poised to grow up to $202 billion by 2028.

The Google’s plan of entering e-commerce business has come as a surprise for many including e-commerce companies, analysts and media. The details regarding it is yet to be public as the company is silent about whether it would launch by November.

Nevertheless, if we analyse Google’s recent investments and put them into context then it appears that Google has been ramping up for an e-commerce play.

For an instance, Google invested $12 million in concierge service dunzo in December last year. “Dunzo was a very unusual investment for Google in India. Typically, it makes investments in pure-play technology companies,” says Satish Meena, Senior Forecast Analyst, Forrester.

Unlike pure-play technology company, dunzo is a manpower intensive firm. In fact, technology is a very small component for dunzo. Then, why has Google invested in it?

“Google wants to understand supply chain and logistics challenges in e-commerce space. Instead of conducting research on its own, it’s procuring intelligence from dunzo,” said one of the co-founders of a horizontal e-commerce company to Entrackr on condition of anonymity.

He also points out that Google usually shies away from cutting small cheque like it did in case of dunzo. “The investment indicates that Google is preparing for e-commerce entry,” he adds.

Besides dunzo, Google also invested in fashion-focused e-commerce marketplace - Fynd. The Mumbai-based company follows an online-to-offline model, where it showcases products including apparels, accessories, footwear, and jewellery from a brand’s in-store inventory on its platform.

“Again, investment in Fynd is more for understanding O2O space in India,” says Meena. Over the past one year, e-commerce companies have been ramping up omnichannel retailing. Apart from selling online, they see potential in integrating offline element.

Since Fynd works with branded brick & mortar stores, Google has been gaining crucial actionable insights on O2O front.

After leading investments in these two companies, the search giant also invested in Aye Finance. The Gurugram-based company that provides loans to manufacturing business such as apparels and handicraft amongst others.

Providing cash flow and capital to seller ecosystem has been one of the important steps for a full-fledged e-commerce play in India. Right from Flipkart, Amazon to Snapdeal - all have been facilitating loans to sellers via partnerships with banks and NBFC.

In case, Google gets into e-commerce business, experts point out that it can easily integrate lending capabilities through Aye Finance.