Now, just over a year later, they have finally brought the flagship Amazon brand online and it promises to be an experience on par with their global offering. With Amazon, customers will now be able to purchase directly from their online webstore which is based on the online marketplace model while retailers of varying sizes can rely on Amazon's strength and expertise in handling network reach, infrastructure and customer service, though it remains to be seen how Amazon goes forward with Junglee, now that they have formally entered the online retail business under their own brand.
This is bound to add pressure on the current poster-boys of Indian online retail - Flipkart, Snapdeal, Indiatimes Shopping to name a few. Flipkart is considered to be one of the leading names in online retail with a customer base that is enviable and operations that boast of never seen before levels of customer satisfaction and equally impressive order processing times. Founded in 2007 Flipkart has seen a meteoric rise and has quickly established itself as a household name when it comes to online retail in India. Their smart positioning, branding and witty advertisement campaigns have successfully enabled them to establish a positive brand recall and impressive brand loyalty amongst India's growing technology savvy internet shoppers. Not to forget Ebay.in who have also massively ramped up operations and marketing efforts in a bid to attract more customers. Yet, profitability and margin pressures on online retail businesses remain a problem. The dangers of the Indian operating environment have been clearly reflected by recent consolidations in this industry. After all, India is an extremely price sensitive market and buyers will go to vast lengths in hunting down the cheapest price for their purchase. Setting up a vast network requires infrastructure, efficiency and dedicated adherence to quality standards and optimizing supply chain networks while ensuring a lean operating structure will require serious effort. Many established online retailers like Buytheprice.com and Letsbuy.com were eventually acquired by other competitors.
Clearly, the Indian market is a double edged sword. While there remains enormous scope to achieve the penetration levels seen abroad for online retail, the dangers stem from the challenges in running a lean and cost efficient operation while catering to the price sensitive customer base who expect the world at an affordable price. Amazon clearly have to leverage their vast expertise in running online retail marketplaces in order to establish their position in India at a time when the Indian economy isn't in the pink of health and price escalations across the board have resulted in depressed consumer appetite for spending on non-essentials.
Having said so, Amazon have made their intentions clear, they are here to stay. An excerpt from the official Amazon.in Press Release - “Our vision, at Amazon, is to be Earth's most customer centric company; to build a place where people can come to find and discover virtually anything they want to buy online. With Amazon.in, we endeavor to build that same destination in India by giving customers more of what they want – vast selection, low prices, fast and reliable delivery, and a trusted and convenient experience,” said Greg Greeley, Vice President of International Expansion at Amazon.com. “We're excited to get started in India and we will relentlessly focus on raising the bar for customer experience in India.”. Clearly, they mean business.
Amazon also shared a few images from their Official Press Release which are reproduced here:
We look forward to seeing how this story shapes up for India. It's going to be a grand battle folks, stay tuned to see how this goes down! And of course, WELCOME TO INDIA AMAZON!
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