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Indian market all set for a cut-throat e-commerce competition.

By,
Vikas Upadhyay,
MBA (International Business), 1st Year
Delhi School of Economics.
Online shopping has become a popular trend in India now and people have been enjoying the
convenience of having their order shipped right to their doorstep.
For the dominant etailers in India, the gloves are on. The Indian online industry has been
witnessing its never experienced swing of events in the recent days and it is just the beginning of
the tussle for the pinnacle. The revolutionary spate of events are marked by the Indian top online
retailer Flipkart, the American online retail giant Amazon and one of Indias largest online
marketplace Snapdeal getting fresh round of investments and preparing business expansion.
Having Flipkart announcing a $1bn financing, not even a single day had gone by before Amazon
decided to invest $2bn into its India business. All three companies are all set to invest in the
areas of working capital, technology and fulfillment centres to establish their supremacy in the
Indian online retail

Growth of e-commerce was low in starting owing to the initial inhabitations, but is growing with
extraordinary pace as the confidence of Indian buyers is increasing and is on a way to become a

Rs 50,000 industry by 2016. In the recent times many e-commerce websites have mushroomed,
giving tough competition to one another with striking deals like free shipping, free gifts, return
policies, single day delivery and many more. Amazon, Flipkart, Ebay, Snapdeal, Jabong, Myntra,
Naaptol, and Fashionandyou are the top e-commerce websites in India.

Reason for flourish


-India has over 200 million online users at present which are expected to grow to 0.5 billion in
the next 5 years and 70% of people are expected to transact online. This large base will provide
vast scope for e-commerce businesses to establish themselves in India.
- Favourable demography with two-third of the population below 35 years for whom the internet
would be a conventional medium.
- Tier 2 and tier 3 cities becoming the biggest drivers for e-commerce business in India.
- Advanced technologies and web applications with safe transaction assurance making the new
age Indian buyers to shop online

Whos Doing What

Flipkarts focus has been on India e-commerce consolidation to prepare for the Amazon
expansion in India. With a recent funding of $1b, the focus is on building its seller base and
back-end infrastructure including logistics facilities and warehouses. To manage its increasing
complexity, Flipkart is going to sign a call centre outsourcing deal with the Essar Groups Aegis.
Attracting a bigger share of exclusive sales on its portal has been planned, a strategy which has
worked well as in the case of Motorola and Chinas Xiaomi phones, which were sold out in a
flash.
The story goes the same for Amazon and Snapdeal as well, with the other two rivals also
planning to hunt for more space with an emphasis on the use of technology. Amazon has planned

to add a new category and increase the range of books and electronics. To counter the move of
Flipkarts exclusive sales, Amazon launched sales of Samsung phone and Swipes Slice tablets
exclusively and is looking for brands to partner with in future to sell their products exclusively.
The three brands in the recent past have hired venture capitalists to lead acquisition of companies
as well as investing in startups a move to take an edge over the rivals.
To overcome their challenge of delivery in small towns and rural areas, companies like Amazon
and Jabong are implementing the idea of introducing pick up service enabling the customers to
pick their orders from small retail shops or petrol stations.
Categor
Investments

Sales Target

Warehouses

Acquisitions

ies
Focused

Planning
Flipkar

Received

fresh

funding of $1b

$4 b in sales in
next 12 months

to

increase

Myntra,Letsbuy,Mi

Fashion

warehouses from 6

me360,WeRead,Ch

and

to 50 in next 3

akpak

lifestyle

years
$1 b in sales
Amazo
n

Announced $2b to
build

Indian

Business

this fiscal and


hoping

to

achieve

30%

market

share

soon

Planning

to

increase
warehouse

Electroni
count

from 7 to 10 in few

Raised about $233

eal

million this year

$1 b this year

cs

and

books

months
Has

Snapd

40

warehouses in 15

Grabbon.com,

cities and will be

esportsbuy.com,

expanding

hopo.in

to

30

Fashion

cities within a year

Concluding Remarks
With the housebred Flipkart being the favorite at the moment, Amazon and Snapdeal are not
behind. Both the of them have already sold $600 m worth of merchandise so far this year, simply
indicating that the two are running abreast in the race to oust Flipkart from the crest. For
Flipkart, the acquisition of Myntra may just prove out to be a blessing as Myntra is a dominant

player in the higher margin apparel business. But it will be a challenge for Flipkart to keep itself
sustained against the prodigious Amazon and its perseverance to achieve the marketshare. Vis-avis for Amazon, it would have been a big fish in a small pond situation had Flipkart not been
there.
With all this happening in our own country, an eye is also kept upon the expansion and intentions
of the Chinese e-commerce giant Alibaba, which is poised to record one of the largest public
listing by an internet company in August and has launched an online retail portal in the United
States challenging Amazon in its home and can turn its attention to India. This could increase
the intensity of competition and lead to more of e-commerce industry consolidation.
But this competition will create significant employment opportunities in India. Also it is assured
that the people of India would be having a lot more access to newer and cheaper products. The
online retail sites will be penetrating the market by attracting more customers. Heavy discounts
are in line by all of them. So no matter which of these e-commerce gladiators win this war, it will
be an Indian consumer who will be having the last laugh.

References
-

http://www.business-standard.com/article/companies/snapdeal-raises-100-mn-eyes-1bn-revenue-

this-year-114052100665_1.html
http://en.wikipedia.org/wiki/Flipkart
http://en.wikipedia.org/wiki/Snapdeal
http://ibnlive.in.com/news/india-will-surpass-us-in-number-of-internet-users-this-year/492270-

11.html
http://economictimes.indiatimes.com/tech/ites/flipkart-to-outsource-some-call-centre-work-to-

aegis/articleshow/39779913.cms
http://yourstory.com/2014/05/sachin-bansal-flipkart/