Both the players are introducing new product categories and plan to sell everything under the sun.
Amazon aspires to be ‘everything for everyone’
The American ecommerce giant doesn’t want to stick a specific target market or format. Instead, the firm wants to reach out to every consumer in India and deliver what they need. Experts believe that this strategy isn’t viable but the etailer is pretty confident about pulling it off.
Amazon India Head Amit Agarwal asserted,
“Our ambition in India is to become everything for everyone. We don’t think that way (whether the time has come in India’s ecommerce market to target particular segments of customers). We believe customers, wherever they are in India, should be able to buy and get products delivered to them… The differentiator is about how you deliver the customers’ needs and not in trying to create formats. Amazon does that globally and we have been successfully doing that, and India is no different.”
Amazon India’s customer acquisition grew by 60% in 2016. This growth was driven by online marketplace’s efforts to explore tier 2 and 3 cities. The rising number of internet users also helped Amazon to acquire new customers.
Flipkart to focus on unexplored product categories
While Amazon is keen on increasing its consumer base, Flipkart want to sell new products to its existing shoppers’ base. The home-grown etailer is pushing the sales of fashion, groceries, furniture, and large appliances. Their aim is to match the popularity of product categories such as mobile phones, electronics and books.
Flipkart’s COO Nitin Seth revealed,
“The biggest lever of growth over the next couple of years will be: increasing the online penetration in the other categories (fashion, furniture, large appliances and groceries). And online penetration increases when you reach a certain tipping point where like in mobiles, you’re able to deliver quality products at a very different price point—some 20% to 40% lower than what you get offline.”
The change in strategy is the result of CEO Kalyan Krishnamurthy’s entry into Flipkart’s management. The Indian etailer realized that instead of spending money on new consumer acquisition and advertising, they should work towards increasing category penetration and transaction rate per customer.
“…By November or so, a lot of this focus around increasing penetration and increasing our units and transaction per customer, deepening penetration in each of the categories, category-specific strategies became clear and over the last five months that’s reflected very clearly in our strategy, in the market moves we are making and also the various product capabilities that we are looking to build.”
Be it new users or new categories, the ecommerce biggies are all set to pamper Indian buyers. This also opens up an opportunity for sellers since ecommerce biggies would need vendors’ support to become ‘everything for everyone’.