India is at the moment one of the most written about ecommerce markets. The size of the country is contributing to the rapid development and investment into Indian ecommerce. Amazon is supposedly considering the market in 2012, so the local businesses are trying to get set before big A arrives.

As it is a developing internet market it poses challenges to international companies who are considering entering the market. I believe everyone who is interesting in the market are either considering acquisitions to enter the market or are investing heavily to ensure that their offers will draw Indian internet users.

Investment firms have pumped $140 million into e-commerce startups over the past six months, compared with just $48 million in 2010 — while the valuations of some startups soared four to six times, according to a recent article in Forbes India.

The big thing is that companies who did not get involved in China for example are looking at India as a market to enter. The concern is that they don’t want the short end of the deal again.

Entering a developing economy is not anything like the challenges facing investors going in a mature developed market. You will face bigger challenges which will be solved with creative thinking as seen with Flipkart.

Founded in 2007 by Sachin and Binny Bansal, two Indians formerly employed at Amazon, Flipkart has succeeded by adjusting the e-commerce model to fit local conditions. With credit-card penetration low, and the postal service and couriers notorious for lost and delayed shipments, the company pioneered a cash-on-delivery payment system and an in-house courier system that covers almost one-fourth of the country. Now selling music, movies, games and software, mobile phones and electronics, as well as books, the company reportedly does $6 million in sales per month.

Flipkart is the darling of the Indian market at the moment.. but many other competitors will arrive as other companies want part of the action.

Update: After writing this post and thinking carefully about the fact that ecommerce is a global industry I failed to add that Amazon is definitely a factor in India. After  seeing an article from comScore I think that one needs to always keep in mind that the big eCommerce players will impact your market. It would be ignorant to not have Amazon, eBay etc in mind.