The Flipkart-Amazon Tug-of-War for dominance
By Pooja Vishant 
Following Amazon’s foray and growth in the Indian e-commerce market at a startling pace, home grown etailers like Flipkart and Snapdeal have been basking in all the acquisitions and funding to stay afloat in the battle for supremacy. Flipkart’s acquisition of Myntra just a few days back is testimony to this and the deal estimated to be of $330 million is considered to be the largest in the string of transactions that have happened so far.
Although the e-commerce market in India is still highly fragmented, Amazon’s entry led to a general feeling for the need of survival in the hyper sensitive e-commerce scenario. The Flipkart-Myntra deal has been the biggest merger so far but more consolidations could be in the horizon as domestic players now feel the heat of competition.
Interestingly, Flipkart’s founders are ex-Amazon employees and although staying ahead of Amazon is an aim, that’s not the only thing in their minds. They want to be the Indian version of the Chinese online shopping giant Alibaba. Flipkart’s co-founder Sachin Bansal says that Alibaba is their role model, as the Chinese e-commerce scenario is bigger than even US, and emphasises on how there is a lot of similarity between the Indian and Chinese online retail markets.
While India’s e-commerce market is much lesser compared to the Chinese, experts believe Flipkart’s ambitions are not far-fetched considering the similarities in the billion-strong population and rising tech-savvy users in both the countries. Mirroring the growth of e-commerce in China, online retail sales has grown at the rate of 60 per cent in India.
Are the investments/funding paying off?
Technically, all the players, including the major ones, are losing money per se or not making enough profits. However, funding and investments are still pouring in to the market as everyone is looking at the big picture and concentrating on building scale, at the end of which profits and returns will start coming in.
The Flipkart-Myntra deal is also about scaling up faster in order to face the global e-commerce giant Amazon and is expected to be a game-changer in the Indian e-commerce space. The team is confident of taking on Amazon with their logistics, supply chain and customer centric approach to online selling.
The Amazon team recognises the tremendous growth potential of online shopping in India and has grown at a blistering pace since launch last June. Product categories have multiplied along the way in addition to a number of customer friendly services like same and next day deliveries, a cue for other players like Flipkart and Snapdeal to follow suit.
According to analysts, it is an Amazon vs Flipkart fight now, with Snapdeal following close at their heels.
Benefit for an Indian Online Seller in the marketplace battle for supremacy
Right now, everyone is focusing on scaling up despite the losses in margins. Unbeatable prices and discounts are the order of the day to widen customer base and retain existing loyal customers. There is a lot of money pumped in for advertisements and other marketing means to attract customers. As a seller, you can utilise the various services offered by these marketplaces to expand your product portfolio and widen customer reach.
Might as well bank on the credibility of these players to push your sales don’t you think?
No comments yet. Be the first to comment!