Ecommerce battle heats up in India


payment processing Ecommerce battle heats up in IndiaOnline retailers like Flipkart, Snapdeal and Amazon are engaging in increasingly intense competition across India, where business models and consumer habits are still developing.

Flipkart, Indian’s leading ecommerce platform, has set the goal of generating $1bn in annual revenues by 2014, versus a projected $100m in its current financial year. It recently purchased Letsbuy.com, an electronics site, to help achieve this target.
“It’s a nascent market and it’s going to be huge in the long term,” Binny Bansal, the co-founder and chief operating officer of Flipkart, told the Wall Street Journal. “We have a large opportunity here to build a great business.”
Technopak Advisors, the consultancy, forecast that Indian ecommerce sales could stand at $70bn in 2020, compared with $600m at present.
“The real growth and transformation in the market will happen in a couple of years,” said Saloni Nangia, president of Technopak. “There will be some winners and losers.”
Snapdeal is pursuing an alternative approach to Flipkart, mainly focusing on selling goods on behalf of third party vendors, meaning the firm does not require its own warehouses. It hopes sales will hit $100m in the latest fiscal year.
“The problem with these low-margin, own-everything-before-you-sell internet businesses is they just can’t scale up rapidly – it’s very hard,” said Kunal Bahl, Snapdeal’s chief executive.
According to the Internet and Mobile Association of India there, are 112m web users in India today, but some analysts predict this total might surpass 300m in the near future.
Such figures have encouraged Amazon, the US ecommerce pioneer, to enter India, albeit with different tactics than elsewhere. Its Junglee site aggregates products from other online and offline retailers, like Bata India, Fabindia and Reebok.
“We are excited to give customers in India a single online starting point where they can shop a wide selection of products sold by local and global retailers, and make informed purchasing decisions,” said Amit Agarwal, a vice president at Amazon.
Asheesh Raina, principal research analyst at Gartner, the insights provider, suggested that Amazon was seeking to “get an insight into the Indian market” in a shrewd, and low-cost, move.
“This market could be a game-changer for Amazon – these e-commerce retailers survive on volume. India with its large number of people could be a huge opportunity,” he said.

Courtesy – Warc.com

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