Amazon started operations in India in February 2012 with local brand Junglee.com and subsequently launched its own digital marketplace in June 2013. Initially, though only two product categories were offered, the world’s largest online retailer is now India’s largest player too in terms of the number of product offerings.
Within just ten months of its existence, Amazon India has overtaken the other two leading home-grown ecommerce giants Flipkart and Snapdeal, and US based e-portal eBay.
Since June 2013, Amazon India’s product offerings stand at 15 million today across 20 product categories, with an increase in the number of sellers also by 30 times. Over 75 percent of the products are fulfilled by Amazon.
Flipkart has already crossed $1 billion in sales with Snapdeal following close behind with sales of $1 billion to be achieved this year. Although Amazon is not the in $1 billion club yet, it is expected to reach the milestone in another 12-18 months considering the way it has quietly built up its operations and aggressively added sellers to expand reach.
In the fight for the frontrunner spot in the Indian ecommerce segment, Amazon already has the largest product offerings in many categories like music, books, toys, video, bags, luggage, home and kitchen appliances, and fashion jewellery.
For extending reach and faster delivery speeds, Amazon operates two fulfillment centres, Bhiwandi (outskirts of Mumbai) and Bangalore. Next-day shipping has been made available for about 165,000 goods catering to more than 50 percent of customer demand, across hundreds of pin codes in India.
In the Competition with Amazon India
All the other major players like Flipkart, Snapdeal and Myntra are competing vigorously with the global giant. Amazon has the major advantage of global branding while local players have to make more effort to reach out to customer.
- After Amazon launched its marketplace in June 2013, Flipkart launched its own marketplace. Flipkart started same-day delivery service within five days of Amazon’s launch of its same-day delivery service.
- Fashion portal Myntra also started same-day delivery service in select cities.
- Snapdeal, currently offering same-day delivery in Delhi, is trying to extend the service to other cities as well.
- Apparel-focused Myntra and furniture-centric Pepperfry are major competitors of Amazon because product and price are not the only factors in furniture and apparel. Customers like variety and service; hence it is easier for a specialty retailer to score more in these segments.
Opportunity for Indian Online seller with Amazon’s rising popularity
Amazon is a global player and has the major advantage of global branding and global recognition. It is easier for them to strike a chord with customers as the name is associated with trust and efficiency.
Sellers selling through the Amazon platform will have the benefit of banking on trust and credibility for Amazon in customers’ minds. Also, with Amazon’s expansion efforts, sellers will be able to reach out to a wider customer base, leading to increase in sales and recognition.