Indian e-commerce market has attracted the global leaders as it has become of the largest in the world. American e-commerce giant Amazon has been doing great business in the country. Following their footsteps, the American retail giant, Walmart came to India to acquire Flipkart, which is the largest e-commerce player in the country. Similarly, the Chinese e-commerce giant Alibaba has been investing huge amounts in the Indian startups and helped start Paytm Mall that has become one of the largest platforms in the country as well.
The online insurance market in India is around Rupees 3,5000 crores which is over $5 billion. Both the e-commerce giants Amazon and Flipkart want to grab the biggest share of this market. The market consists of categories such as general insurance, auto insurance, travel and even mobile phone and other electronics insurance.
Both companies have options such as travel ticket booking on their platforms. Along with the booking, they can offer travel insurance in the package itself. Likewise, these platforms sell majorly electronics such as smartphones and home appliances. With these consumer electronics and home appliance products, they can sell the damage and theft insurance.
The plan was to launch the product in early March but it was halted due to unforeseen hurdles. The Indian government launched the new FDI policy, which impacted the e-commerce business in India. The e-commerce players were so much invested in the issue that they could not focus on their online insurance business plan and hence, it was postponed. According to reports, it will be launched by both the giants in the second H2 of 2019.
Insurance is a little complex field and it needs well-trained minds in the fields to understand the nuances. Flipkart and Amazon are roping in the veterans of the field to guide them through the maze of various insurances and make strategies for them to launch the business as soon as possible.
One fact that people tend to ignore is that these big companies are not perfect in everything. They have expertise in online shopping and that is it. This is the reason these companies are so much interested in acquiring online insurance-based companies or invest in similar companies to get a deeper understanding of the whole market and its functioning.
On one hand, Flipkart’s co-founder, Binny Bansal invested a massive amount of $65 million in Acko general insurance. On the other hand, Amazon India also invested around $12 million in the same company for the same reason as Binny’s. In fact, ex Softbank manager, Kabir Mishra also invested from his personal fortune in Acko and the reason is the same again. This shows the interest these companies are taking in the insurance field because they have seen the benefits of investing in this sector. After the advent of internet technology into the insurance field, the field has gained new life and it has become easier for people to search, compare and buy insurance.