India’s long-neglected retail market is turning into one of the world’s hottest thanks to Warren Buffett, Jeff Bezos and a frenzy of billion-dollar dealmaking.

Walmart Inc. just wrapped up a $16 billion agreement for control of the country’s leading e-commerce player, Flipkart Online Services Pvt., while Bezos’ Inc. negotiates deals with a large supermarket chain and an investment in a prominent retail conglomerate, according to local media. This week, Buffett’s Berkshire Hathaway Inc. agreed to acquire a stake in the company behind digital payments leader Paytm.

Why the sudden interest in India? The new optimism is fueled by rising standards of living, increases in smartphone usage and cheap data plans that are boosting internet penetration across the nation. Perhaps most important, India is the last big retail market still up for grabs, with an internet economy projected to double to $250 billion by 2020.

"It’s a race for leadership,” said Anil Kumar, the Bangalore-based chief executive officer at researcher RedSeer Consulting. "There’s far more action in India compared with stable markets like China and the U.S."

Online sales grew 23 percent last year and are up 40 percent so far in 2018, according to RedSeer. The organized retail market is under-penetrated, leading to tie-ups between online and offline players, and driving unprecedented levels of investments, Kumar said.

India’s vast retail industry has no parallel other than, perhaps, China. But unlike the Chinese market, dominated by Alibaba Group Holding Ltd., India is relatively open and largely unconquered, offering global players vast opportunity to grow.

India is now the world’s fastest growing major economy, and per capita incomes have been climbing steadily. According to a Forrester Research Inc. report earlier this month, the South Asian country is the world’s fastest growing e-commerce market.

Amazon and Flipkart have cornered about three-quarters of the online Indian retail market, but other big players are getting aggressive. That’s meant heavily discounted offerings for consumers, although the substantial investments have crimped profitability.

When Walmart announced the Flipkart deal earlier this year, S&P Global Ratings changed its outlook on the U.S. retailer to negative, saying that Flipkart was poised to generate losses in the next few years.

“The appeal of retail lies in the population of India, the aspirations of India, the consumption power of India,” said Kishore Biyani, the billionaire chief executive of Mumbai-based retail conglomerate Future Group, which runs the 2,000-plus store Future Retail Ltd., including the country’s largest departmental chain.

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