In the fight between Amazon and Reliance Industries Ltd (RIL) for dominance in India’s burgeoning online retail market, the two companies continue to mirror each other almost mutually in innovative strategies to build the ecosystem. most favorite retail store among consumers, partnering up step by step. . This can only intensify for the foreseeable future, given the high stakes, experts said.
In recent years, Amazon like RIL, has invested in several companies. He targeted segments such as fintech (Acko, Capital Float, Emvantage and ToneTag), platform sellers (Cloudtail and Appario), the financial services market (BankBazaar), booksellers and publishers (Westland), services to home (Housejoy) bus aggregators (Shuttl) and all-in-one aggregation app (Tapzo). Over the past year, Amazon has also expanded into online airline ticket ordering, food delivery, online pharmacy, and education.
RIL invested in the Netmeds online pharmacy to take on the Amazon pharmacy. He bought the logistics start-up Grab to fight Amazon Food. RIL deployed Jio TV and Cinema and acquired the Saavn music streaming app to take on Amazon in outer space.
“E-commerce players like Amazon and Flipkart are working on their offline selling strategies in India. Globally, similar strategies are being followed by Amazon and Alibaba to refine their online to offline strategy, ”said Garima Mishra, analyst at Kotak Securities.
Amazon also wants to use these stores’ offline footprint to promote its own private brands. These include AmazonBasics, which offers products such as ACs, HDMI cables, batteries and cables, housewares, and general merchandise and clothing labels, as well as Prowl and Just F. Amazon can also use these stores to retail its grocery brands.
In India’s $ 33 billion online marketplace, Amazon and Flipkart are dominant entities, together controlling 81% of the market share. However, RIL’s nascent online services are estimated to have a 1% market share in 2020.
Amazon India, which launched its operations in the market in 2013, has invested in supply chain infrastructure, vendor training and onboarding, and customer acquisition. Amazon Prime, launched in July 2016, has ensured customer loyalty in Amazon’s ambition to become a one-stop-shop, not only for consumer retail needs, but also for others, including video (Prime ), payment solutions (Amazon Pay), smart devices (Alexa, Firestick and other proprietary products) and ticketing (allowing train and plane reservations).
To strengthen its offline supply chain, Amazon in July announced a 20% increase in its warehousing capacity in India to 32 million cubic feet and now operates 60 distribution centers (CFs) in 15 states. It recently launched “receiving centers”, which serve as product collection points where sellers ship their products for further distribution over the Amazon FC network in India. RIL also aims to invest in logistics and supply chain.
“Given its current debut in e-commerce, we believe RIL has some catching up to do with Amazon / Flipkart in terms of consumer interface, technology investments and logistics / supply chain,” said BofA said in an October 23 note. we don’t expect RIL to be a formidable challenger for Amazon and Flipkart in global e-commerce given their first-mover advantage and Amazon / Flipkart’s best end-to-end experience, ”he said. declared.
Analysts said online fashion is an area where Amazon is relatively weak in India, although it is working to improve its portfolio. Myntra / Jabong and Flipkart’s fashion businesses together control over 60% of the online fashion market. “Online fashion is one of the very few areas where Amazon is relatively weak in India and the company aims to improve its portfolio here. In the years to come, we expect Amazon to continue improving its value proposition to Indian consumers, ”BofA Global Research said in a note.