Can Amazon charm India?
Amazon.com is betting on growth in India.
The world's leading online retailer is in the process of opening a fulfillment center in the world's second most populous nation.
There's no denying that India will be an important market for any Web-based retailer with global intentions, though just because Amazon is setting up a physical presence in Mumbai doesn't mean that the rupees will begin pouring in right away.
Despite its large population, Internet connectivity is still a luxury in India. India's Draft National Telecom Policy promises to ramp up Web access throughout the country, but it's not going to happen overnight.
Let's consider India's three dot-com pure plays that trade on stateside exchanges.
- Rediff.com runs a popular portal in the densely populated nation, but it's still a tiny and slow-growing company that lacks profitability. Revenue climbed just 1% to just $5.1 million in its latest quarter.
- Sify provides connectivity, hosting, and other IT-related services through India, giving it a front row seat to this quiet revolution. Revenue grew by just 6% in its latest quarter, but Sify's deficit did narrow substantially.
- MakeMyTrip is the speedster in the group. The Indian travel portal saw its revenue surge by 84% in its latest quarter, though it's barely profitable at the moment.
It's a smart move, but investors need to be patient. India's dot-com revolution wasn't dialed up in a day.
This article originally appeared onDailyfinance.com.