Amazon entered India almost a year back with the marketplace Junglee.com
With the FDI discussions being the hottest topic of discussion in retail industry, people were anticipating that Amazon would sooner or later surely enter India market with its original brand Amazon itself.
Though not complete, but closely, Amazon launches Amazon.in
But its not direct selling, its yet again a marketplace like Junglee with only Amazon name.
As of now, Amazon India has been launched with only 2 categories - Books & Media (Movies & Music), with over 7 million titles in books and close to 15k Media titles.
Not just this, very soon they would everything what we seen on Amazon.com , hopefully Amazon Stores as well.
Strategy & Impact -
Why did Amazon launch another marketplace in India when they already had one ?
This is definitely one of the most pertinent question making rounds amongst the e-commerce professionals in India.
Its very clear that FDI norm is still withholding Amazon from selling directly but the day is not far when Amazon will penetrate Indian market with a bang. While Amazon continues to sell products through Junglee & Amazon.in, its giving an earning opportunity to many re-sellers like uRead, BookAdda, etc But what will happen to these re-sellers once Amazon starts selling directly, there revenue will definitely see a huge dip.
The launch of Amazon.in is basically to create a shroud of confusion amongst Indian buyers. MANY Indian buyers think that Amazon has entered India market and is selling directly. The magnitude of this effect is big.
Many Indians are expected to ' Experience Amazon' and with no cap on free shipping for a limited time, we are definitely going to see a spike. Its alexa rank in India is already 651 which is much better than Tradus and few other key players. What more, almost all e-commerce player in India has seen a downward trend in traffic this week.
Does this mean bringing down Junglee ?
Amazon would continue with Junglee letting people know that their marketplace is still there, while with Amazon.in it would continue making people believe (or leave people thinking) that Amazon is selling directly and has entered Indian market. Atleast, until Amazon is legally allowed to sell directly in India, it would continue this way.
Impact - Positive & Negative
With a downward trend seen in web traffic of Indian e-commerce sites, the founders of key players have already started sharing their thoughts around.
What's best is that you can sense an uncertainty, confusion and fear in them, which they are trying to hide.
Sandeep Agarwal, founder & CEO of Shopclues (one of the leading ecommerce portal in India) in a talk says, " I personally feel that Government of India should have given two more years to start-ups before opening the doors for Amazon. This can back fire in terms of opening retail market to such a large E-Commerce company this early "
When such a big name is worried, what would be the plight of those thousands of new and aspiring founders who have or are planning to launch their portal. Would the VCs and Angel Investors be willing to invest in India (into ecommerce) at this point of time ?
This eCommerce boom in India gave birth to many start-ups who are either into selling or supporting an e-commerce portal - delivery, support, marketing, platforms, etc. If these start-ups would face a problem then wouldn't the agencies also face a downfall ?
Yes, mostly the impact would be negative except for the marketing segment. It is expected to be a boon for them. The current players will have to invest more into online and/or offline marketing to sustain their market share and place.
Truth & Facts
India being the 3rd largest internet population in the world and with population close to 1.3 billion people, India is expected to overtake China within couple of decades. This would mean that in few years time the number of internet users in India would be higher than that of United States(though the internet penetration is US is much higher than India).
This makes India one of the biggest online market in the world, hence Amazon & Walmart would definitely want to stay here. Having said this, they will definitely build expertise and 'localize' in India. A simple statement to help you understand this better would be the advent of Dell & HP brands. Can you name 5 Indian PC making brands ? :) In case if you are given an option to buy a laptop, majority would want to choose either an HP, Dell or Lenovo
With a permit to Amazon & Walmart, its for sure that Many people would definitely be effected. But who would benefit from it the most ? Its You - The Consumer :)