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Tag: Amazon

  • Amazon India announces multiple new Originals in reality series format

    Amazon Prime Video ventures into reality shows in India

     

     

    Amazon Prime Video India has announced the creation of multiple reality shows for India, a first for a digital streaming service. The lineup comes to life with three new reality shows – Jestination Unknown, The Remix and Comic Kaun featuring stars such as Vir Das, Anu Menon, Amit Trivedi, Sunidhi Chauhan and Nucleya; and comedians Tanmay Bhat, Sumukhi Suresh and Abish Mathew.

     

    Said James Farrell, Head of Content, Prime Video, Asia Pacific: “Reality shows are now more popular than ever, across a variety of genres. Customers globally have told us how much they enjoy reality shows, like the Japanese Prime Video fan favorite, The Bachelor Japan. With the launch of multiple new Original reality shows, we’re aiming to offer our Indian customers a variety of quality new reality content to enjoy.”

     

    Added Vijay Subramaniam, Director, Content, Amazon Prime Video India, said: “We’re always looking for new ways to engage with our customers. We know Indians enjoy reality TV, so we are creating new originals with the best new concepts and local Indian talent. We’re excited to add more variety to our service, and continue to reinvent the way Indian customers watch TV.”

     

  • Amazon Fashion's new campaign created by Ogilvy Bangalore

    Amazon talks to the youth with ‘Citizens of Fashion’ pitch

    By A Correspondent

     

    There was a time when you could tell by a person’s clothes if he was from the city or a small town. Now you can’t. Today, youth across metros, cities and small towns have access to top national and international fashion brands that reflect their global aspirations and style. Based on this insight, Amazon Fashion’s new campaign shows how fashion has become a unifier and a language that bonds Indian youth into a cult called ‘Citizens of Fashion’. A 3600 degree campaign encompassing TVC, Digital, Print and OOH, Citizens of Fashion portrays the new Indian youth who remain rooted within, but are breaking traditional stereotypes with their sense of style.

     

    Shot in Varanasi, the two commercials show how Indians in every nook and corner are becoming increasingly fashion aware. Created by Ogilvy & Mather Bangalore and directed by Arun Gopalan of Storytellers Productions, the films are set to foot-tapping music and have slick cinematography.

     

    Azazul Haque, Executive Creative Director, Ogilvy Bangalore said: “Fashion belongs to everyone. It belongs to those who live in Paris. It belongs to those who live in Banaras. All you need is the desire to look stylish and fashionable. Amazon Fashion wanted to celebrate these citizens of fashion who live everywhere. In small towns. In big cities. Amazon Fashion wanted to become the destination for anyone who is seeking the latest style and famous fashion brands, online.”

     

    The idea was to make brand Amazon Fashion edgy yet relatable. Extremely fashionable yet mass. So came the idea of Parispur and Rioganj. People who are extremely fashionable yet earthy. The contrast of people in an extremely relatable backdrop behaving like the mass of India but dressed in high fashion clothes. People who turn Kamalapur to Parispur and Raiganj to Rioganj. People who are the citizens of fashion.

     

    Arun Sirdeshmukh, Head of Amazon Fashion said: “Amazon Fashion is one of the fastest growing stores on Amazon.in with a wide selection of over 2 million fashion products available across categories. Our fashion store has now become a one-stop destination that offers engaging fashion editorials, curated selection and a wide range of top national and international fashion brands. The new campaign reinforces our transformation vision in India as we bring the latest and exclusive in fashion to the doorstep of our fashion savvy customers across the country, including tier2/3 cities.”

     

    Apart from the two TVCs, the campaign also includes a 95second digital film – a fashion manifesto that talks about a set of beliefs and attitudes, Citizens of Fashion live by. There’s also a first of its kind activation idea being executed. Watch out, Citizens of Fashion are going to surprise you again.

     

     

     

  • Two of five online sellers use more than one e-commerce site for sales, notes the study

    Amazon, Flipkart & Snapdeal have highest brand equity amongst e-comm sellers, notes new Nielsen study

     

    By A Correspondent

     

    Amazon, Flipkart and Snapdeal have the highest brand equity amongst e-tailing websites. The three e-comm majors ranked first, second and third amongst sellers as per Nielsen’s newly launched E-commerce Sellers study Q1 2016 (Jan-March2016). Familiarity, which had come up as the top driver for building equity in the category, is demonstrated by top-of-mind recall. The top three players among the first brand spontaneously recalled were Amazon (25%), Flipkart (21%) and Snapdeal (20%). In terms of overall awareness, Amazon (86%), Flipkart (82%), and Snapdeal (75%) were leading among the others. Intent to sell on the e-tailer is also an important parameter to demonstrate familiarity where the leading brands were Flipkart (58%) and Amazon (55%).

     

    “This study outlines the need gaps in the eco system, and opens avenues for E-commerce platforms  to support sellers.  E-tailers can play a big role in helping sellers develop their category and build businesses – thus also becoming a preferred brand for sellers,”  said Dolly Jha, executive director, Nielsen India.

     

    The findings from the study indicate that 39 per cent online sellers explore two or more e-commerce website as an option to sell products on and grow their business.

     

    The Nielsen study launched aims to understand the inclination and experience of selling products on e-tailing platforms. The study also gauges the brand equity of e-commerce websites amongst connected online sellers, and of those who intend to sell their products online in the next few months. The first wave of the study was conducted in 16 markets with a population of more than one million, and a sample size of over 1100 respondents.

     

    “With the e-commerce industry growing in double digits, there is surge in demand by customers, and an evolving online seller category that is fuelling supply on portals. To ensure the equilibrium of demand and supply, it is essential for e-commerce portals to focus on developing an inviting platform for online sellers in India. Sellers are also increasingly discerning when it comes to reaching their customer and meeting business needs,” said Jha, adding: ”Considering the juncture at which the category is, it is now very critical for e-tailers to understand push and pull factors that make sellers pick one website over the other. The study will also help understand the impact of marketing activities.”

     

    A high level of familiarity along with indepth  knowledge of an E-commerce website is the most important factor that drives brand equity, notes a Nielsen communiqué. Other key factors that impact brand equity are certain perception of the e-tailers: “They help the sellers stay relevant and ahead of competition” , “Provide new market opportunity”  and “Help minimise costs to reach out to more customers” .   At a micro level, other important attributes include potential of reaching out to customers from the same locality , ensuring publicity for the shop, and those websites used by peers and competition. Helping sellers save on in-store and inventory management, as well as a platform that would be most profitable to sell products on are critical when looking for new opportunities and markets. The ability of reaching out to a pan-India customer base, savings on logistics and requiring minimal investment are other considerations sellers look for while choosing e-tailers.

     

  • The campaign, conceptualised and executed by Orchard Advertising, part of The Leo Burnett Group India, highlights the many benefits of shopping on Amazon.in

    Amazon celebrates the many quirks of the Indian consumer with #WeIndians

    By A Correspondent

     

    Amazon India has launched an integrated campaign that highlights the unique traits of Indian consumers and their behaviour, bringing alive the spirit of “what we Indians love”. It celebrates Indian quirks whether it’s about dropping newspaper to block a seat in a bus or about seeing Rs500 note under sunlight to check its authenticity. It celebrates who we are, what we like and how we behave as Indians.

     

    The campaign effortlessly ties back these quirks to the brand’s promise of 100% Original Products, Easy Returns, Fast and On-time Delivery and many other customer centric benefits to inspire trust in the brand.

     

    The campaign features series of films that talk about Amazon’s critical customer benefits. Commenting on the launch of the campaign, Amazon India Spokesperson said, “Our brand always tells a story that the customers feel connected to and in a manner that is simple to understand and relevant. It’s about being a part of their lives at the right time and at the right place. On the same lines, our new campaign theme #WeIndians conveys many benefits that Indian consumers seek while making their purchase decisions including original and genuine products, convenience of easy returns and experience of fast and on-time delivery. As always, the new campaign takes the route of everyday situations in an Indian consumer’s life and the customer’s intrinsic responses to these situations.”

     

    Continuing with Amazon.in’s trademark desi style, #WeIndians campaign effectively celebrates Indian style using interesting narratives and established how our offerings and services are in complete sync with what the consumer wants.”

     

    RajDeepak Das

    Elaborating on the thought process behind the campaign, RajDeepak Das, Chief Creative Officer, The Leo Group India, said, “All our campaigns for Amazon have focussed on insights that tell us about the psyche of the Indian shopper. Truths about the Indian consumer that are never spoken about but are so evidently seen in daily life situations.”

     

    Das further added, “The idea of #WeIndians emerged from the fact that Amazon’s strong understanding of the Indian consumer has led to an experience that is top quality and unmatched in the online shopping space. The campaign showcases the Indian consumer’s many quirks in day-to-day life situations. It uses real people, real locations and situations that land a smile on your face.”

     

    Neha Contractor, Senior, Vice President and Branch Head, Orchard Bangalore, commented, “We are proud to partner with Amazon on their journey of building the brand and leveraging rich Indian insights from #AurDhikhao to #TryTohKar, #Apni Dukaan and now #WeIndians.

     

    With We Indians, we have created a strong slice of life connect with the Indian consumer, driving top-of-mind recall by staying true to the brand’s customer-centric approach.”

     

  • Kishore Biyani-led Future Group to bring out ads using word play to target Flipkart, Snapdeal and Amazon

    Flip the Cart, Snap the Deal and Amaz-Off. Future to tease ecom majors with ad offensive

     

    By Sagar Malviya & Pritha Mitra Dasgupta

     

    Future Group CEO Kishore Biyani, who’s never made a secret of his disdain for ecommerce rivals, plans to step up the offensive with a series of ads that use word play to target the three main marketplaces – Flip the Cart, Snap the Deal and Amaz-Off.

     

    This is probably the first time a brick-and-mortar retailer will engage in comparative advertising against online rivals, which have been grabbing share by discounting products.

     

    After nearly three years of deep discounting, most online sellers are now pulling back from this strategy in a desperate effort to shore up their finances, making them vulnerable on this front. Ecommerce discounts are now mostly limited to select brands such as online exclusives, old merchandise and own labels.

     

    The combined losses of the three leading online companies — Amazon, Flipkart and Snapdeal — ballooned to Rs 5,052 crore in FY15 from Rs 1,000 crore in the year before as they sought to build market share. At the same time, several brickand-mortar retailers clocked double-digit same-store sales growth last year, a reversal from the trend in 2014 when physical stores reported subdued demand as ecommerce players wooed away consumers.

     

    As part of the Future exercise, three newspaper jacket ads on Friday will direct shoppers to its Brand Factory discount outlet instead of hunting online for better prices in a manner reminiscent of the pot shots that Pepsi and Coca-Cola took against each other in the 1990s.

     

    The theme will be continued inside the stores, with staff and cashiers wearing T-shirts with messages such as ‘My deal got snapped’ and ‘My cart got flipped’. The 40 or so Brand Factory stores will also wear new facades and selfie zones with the same theme targeting Flipkart, Snapdeal and Amazon.

     

    “We just want to prove the point that both our merchandise assortment and pricing are better compared to online companies. We need to make consumers aware of this fact,” said Biyani, adding that Brand Factory’s gross merchandise value (GMV) in the year to March 2016 was Rs 3,500 crore. Future is India’s biggest listed retailer.

     

    “While we use sales numbers to talk about performance, we are bigger than Myntra or Flipkart in terms of GMV,” he said. As part of its Great Offline Denim Festival, Brand Factory will sell nearly a dozen brands such as Levi’s, Benetton, Lee, Wrangler and Pepe jeans at a 50% discount for three days.

     

    Future has fired ad shots at ecommerce before. For instance, “You can’t take the nation for granted even for a day,” was aimed at Flipkart’s Big Billion Day sale in 2014.

     

    Snapdeal has taken digs at Flipkart and Amazon with its campaign tag line: ‘You don’t need a billion offers to amaze you. You just need to snap the best ones’. It also had about 100 billboards in 20 cities emblazoned with the phrase ‘Achha kiya bata diya, #YahanSeKharido’ aimed at Flipkart, which was running the ‘Nahin khareeda? #AchhaKiya’ campaign last year.

     

    “The intent of a campaign is really crucial,” said McCann India CEO Prasoon Joshi. “Whether the campaign is offensive or not will depend on the intent of the brand. If the intent is shallow fun then it is different. But I personally believe that taking creative potshots at competition cannot be a long-term strategy.”

     

    Brick-and-mortar retailers are also investing in omni-channel strategies and experimenting with global models such as flash sales, such as by offering a single product for sale for a period of 24 to 36 hours. “We are planning flash sales where consumers can get discounts, coupons and offers on several brands by using an app but buying at physical stores for certain hours or days,” said Rajiv Prakash, cofounder of Shouut, which is in talks with Shoppers Stop, Oberoi Mall, Decathlon and DLF Promenade for deal-of-the-day sales.

     

    Source:The Economic Times

    Copyright © 2016, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Etailers like Flipkart, Amazon, Snapdeal, Pepperfry and others have geared up ahead of festive season and the big sales this week

    Gearing up for the Big Sales

     

    By Indulekha Aravind

     

    Manjunath V*, who juggles two jobs with college in Bengaluru, is one of Flipkart’s 16,000-strong delivery force, dropping off 70-80 packages a day. After his night shift with a courier firm ends at 3 am, he snatches a few hours of sleep before leaving for the ecommerce giant’s warehouse at 6.30 am. But, from this week, when the “Big Billion Days” sale kicks off, he says he will be reporting to work at 5 am and looking at an 11-hour shift so that he can complete that day’s sale season deliveries, likely to be 100 a day.

     

    “There’s no fixed time to when we finish — the sooner we complete the deliveries, the earlier we can leave.

     

    But we need to finish that day’s deliveries,” says the 19-year-old. Manjunath’s employer, Flipkart, is looking at shipping 1,03,000 packages daily during “Big Billion Days”, as opposed to 65,000 on other days, according to multiple operations executives with the firm. Its Gurgaon-headquartered rival, Snapdeal, saw sales grow 10 times during its preview Diwali sale held last Monday and is optimistic about similar numbers as the festival season picks up. Furniture marketplace Pepperfry is looking at sales doubling during these months while payment-solutions-firm-turned-marketplace Paytm is eyeing 3x growth. If these projections sound dazzling, it’s because the Diwali-Dassera season is traditionally the time when Indians have shopped the most online, and ecommerce companies expect 40% of annual sales to come from the months of October and November.

     

    And while deep discounts are still the way to the customer’s wallet for companies like Flipkart, Amazon and Snapdeal, ecommerce companies across sectors are also trying to leave nothing to chance while ensuring the customer gets what he ordered, on time.

     

    Gearing Up for Busier Days

    Though the sales only begin in mid-October, companies began supply-chain preparations as far back as May. In fact, Snapdeal says they begin gearing up for next year’s Diwali from the previous year. “Unlike Flipkart, we have a sale every week, which is a good stress test to gauge customer experience. We began getting ready for this Diwali as soon as the last festival season was over,” says Jayant Sood, chief customer experience officer at Snapdeal. The company, valued at $4.5 billion in its latest round of funding, saw a 15x surge in traffic last Diwali, according to Sood. Being a marketplace, it does not own inventory or a logistics team but, last Wednesday, Snapdeal announced a $20 million investment in third-party logistics player GoJavas, in which it holds a 40% stake. GoJavas, says Sood, now delivers in 350 cities. The fresh fund infusion in the logistics company is in addition to the $100 million Snapdeal has invested in the last six months to improve its logistics and supply chain.

     

    In Bengaluru, rival Flipkart has been streamlining its delivery process to meet the daily order avalanche during its biggest annual sale. With last year’s edition of its Big Billion Day coming in for a lot of flak from customers for price discrepancies, inadequate stock and server glitches, forcing the company’s founders Sachin and Binny Bansal to apologise to customers, the company has ramped up its back-end operations.

     

    Flipkart now has 16,000 delivery staff, has increased the number of fulfilment centres from 13 to 16 this year and has automated its warehouses, says Neeraj Aggarwal, senior director, delivery operations. According to another operations executive, who requested not to be named, half the members at each delivery hub have been trained to make 300 deliveries a day. “Earlier, staff would spend a lot of time settling the cash-on-delivery accounts. This year, we have installed cash deposit machines in cities where will see the heaviest sales so that they just need to deposit it in the machines,” he says. Handheld devices to scan items and segregating categories by the day are also expected to cut delay, he says.

     

    For Paytm, this will be the company’s first Diwali as a marketplace. The Alibaba-backed firm began talks with suppliers and logistics firms three months ago and has tied up with 30 courier partners. “We’ve ensured our third-party logistics partners have enough exclusive capacity and have shared our plans about expected sale volumes,” says Saurabh Vashishtha, vice-president, business, at the company’s headquarters in Noida. “We also have very strict service-level agreements whereby the logistics partners will incur losses if a package is not delivered on time. Also, the volume of business we give them would depend on the service,” he adds.

     

    Paytm has introduced a logistics cloud for local courier companies which are big in that particular region but not plugged into the ecommerce economy because they lack the technological capability. Similarly, the company is also creating a warehouse cloud to integrate warehouses run by third parties into its system, which would then be available to the smaller merchants selling on Paytm. “We negotiate with the warehouses so that the small players get a better rate,” says Vashishtha, who attributes the glitches that happened with most etailers last festive season to not anticipating the demand. At present, over 60,000 merchants sell on Paytm.

     

    Of Bulk Orders and Deliveries

    Delivery is particularly crucial for furniture sellers like Urban Ladder and Pepperfry, with staff usually having to assemble the items they deliver. Urban Ladder does not outsource any of its logistics and operates with a team of 850 delivery staff, predominantly in Bengaluru, Mumbai and Delhi. “We control the last mile, so we also take care of the training of all the delivery staff,” says Kaustabh Chakraborty, vice-president, operations. Though the company states that it will take 15 days to process an order, Diwali is the time when there are multiple requests to deliver much faster.

     

    “Each customer might also order 20-25 items for their homes, if it’s a “gruhapravesh” (housewarming) and there is huge pressure from the customer to deliver everything together,” says Govind Raj Kaushik, manager, operations, at the company’s warehouse in Bengaluru.

     

    Furniture marketplace Pepperfry has also moved to take complete ownership of its logistics chain. “This year, we stopped using third-party logistics providers. The entire distribution chain is now centrally controlled so the tradeoff that might have been there between our product and a rival’s will not be there this year,” says Ambareesh Murty, cofounder and chief executive of the company.

     

    Murty says Pepperfry, which ships 300,000 items a month, is looking at a 100% jump in the festival season, just as it did last year. “We deliver to 430 cities and will add another 200 in the next two months,” adds Murty. The company’s fleet of trucks and delivery personnel have seen a five-fold jump from the beginning of the year. It also has an app called Far Eye to track the deliveries in real time. “A delivery does not take more than half an hour. An alert is sent to the supervisor if it takes more time,” says Ashish Shah, Pepperfry’s chief operating officer.

     

    Feet On the Ground

    For hyperlocal grocery platform Grofers, the biggest challenge is ensuring there is adequate staff to deliver the 100% surge in orders it expects in electronics and gift items. The jump in demand is accompanied by higher attrition with delivery staff taking leave during the festival season, says cofounder Albinder Dhindsa.

     

    “We normally add around 10% staff month-on-month but we’ve ramped up our delivery capacity by 40% to 4,200 over the last two months anticipating the dip in attendance,” he says. “We also need to make sure we have a good relationship with the suppliers so that we are the preferred vendor.”

     

    Neeraj Jain, cofounder of electronics marketplace Zopper, is anticipating his first challenging Diwali because, till last year, the company was merely connecting buyers and sellers through calls, and not accepting orders. To help the smaller merchants on its platform deliver on time, Zopper will be underwriting part of the demand.

     

    “We have told them to scale up operations and will be paying them, even if there is not sufficient demand, provided their services are available exclusively to us. We’re also offering incentives if they perform well,” says Jain.

     

    One would expect higher pressure on delivery staff during the peak season, but many did not seem apprehensive. Ravish Kumar*, who picks up returned goods for Amazon in New Delhi and is on the payrolls of a third-party firm, says he will probably have to pick up 50 packages a day, instead of 40. “There was pressure when there were fewer centres but not anymore,” he says, though he adds wryly that the company does not give mithai dabbas for its delivery staff. Amazon also runs a programme whereby a delivery associate is given the opportunity to work as a process associate during the festival season, which could translate into a promotion. On average, in the bigger ecommerce companies, delivery staff are paid `12,000 a month. A customer associate with Vulcan, a logistics firm that works with Snapdeal, says the number of van deliveries might go up from 10-15 to 20 a day during Diwali and Dassera, with an additional `20 paid for each delivery after 20. In Mumbai, delivery agent Arjun Kumar is preparing to hit the jackpot during the festive season, when deliveries are likely to cross 100 a day from the usual 45-50, which would earn him incentives.

     

    “My take home could easily double in these three months,” says the 23-year-old. A section of delivery staff in Mumbai like Kumar had gone on strike earlier this year pressing for the fulfillment of some 21 demands that ranged from toilet facilities to incentives for additional deliveries and returns but unions affiliated to Flipkart, Snapdeal and Amazon and the like have adopted a more conciliatory position since. “Around 15 of these demands have been met,” says Sachin Gole, a leader of the MNS Kamgar Sena. It was the delivery staff affiliated to MNS, the Raj Thackeray-led political party, that had gone on strike in July. “These companies have promised to give delivery personnel incentives once the hectic sale season concludes,” adds Gole.

     

    But though personnel have been recruited, incentives promised and stress tests carried out, there is still one factor that could throw the best laid plans out of gear. “If it rains, it will spoil our delivery schedule,” admits the Flipkart operations executive quoted earlier.

     

    *Names have been changed on request (With inputs from Rahul Sachitanand)

     

    Source:The Economic Times

    Copyright © 2015, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • The company, which started business in September 2009 with Star as a joint venture partner, has now allied with Providence Equity partners

    Star CJ is now Shop CJ, to concentrate on TV-led sales

    By Dyanne Coelho

     

    Leading 24/7 home shopping channel Star CJ now has a new name. It dons a new logo and will be called Shop CJ Network Pvt. Ltd..The company, which started business in September 2009 with Star as a joint venture partner, has now allied with Providence Equity partners. According to Shop CJ Network CEO Kenny Shin, Star exited the alliance as it figured that home shopping was not a part of its core competency. “Star wished to focus on the entertainment and sports business, which is why they quit the alliance,” Shin said.

     

    At the launch of the new logo and identity of the network, Shop CJ also presented its new tagline – ‘Shop a new trend’ by which it wishes to cater to a wider spectrum of consumers.“Shop CJ is focused on trends to transform the Indian customer’s lifestyle. We are not focused on discounts and on catering to the customers pockets like our competitors Flipkart, Snapdeal and Amazon,” said Shop CJ Marketing head Donald Kwang. Kwang stressing that unlike some e-commerce destinations, Shop CJ’s major sales come from its television network. As much as 94 percent of CJ Shop’s sales are from TV, whereas a meagre 6 percent comes from the internet and mobile combined. “For the time being we would like to focus on our television consumers, as they contribute to the largest part of our revenue,” Kwang added.

     

    The rebranding of Shop CJ is to better align the company’s philosophy with its future strategy. Talking about future initiatives, Shop CJ CFO N. Ramakrishnan said, “We are looking to expand in the east and north-east through physical warehouses. We are also looking to enhance our warehouse management system in order to enhance logistics and boost back-end services.” In order to further their stance in the e-commerce market, the company is attempting to understand buying patterns of the Indian consumer. “Indian consumers have a much rationalizsd purchase behavior. If they don’t like a product, or if the quality of the product is not up to the mark, they will send it back. This is why we ensure a high standard of product quality testing,” said Shin.

     

    Other than India, parent CJ O Shopping operates home shopping networks in Korea, China, Japan, Thailand Turkey, Phillipines and Vietnam.

     

  • TAM Adex data show that the big four e-commerce companies ­ Amazon, Flipkart, Snapdeal and OLX alone spent a staggering Rs 600 crore on ads in 2014. Overall, the sector spent Rs 750-800 crore in 2014 and the budget would cross Rs 1,000 crore in 2015, say media planners

    E-com majors Flipkart, Amazon etc spend mega on ads

    By Shambhavi Anand & Pritha Mitra Dasgupta

     

    Ecommerce, probably the most happening sector in India, has turned into one of the hottest for the advertisement industry , too.

     

    Spending on advertisements by e commerce companies surpassed that of consumer durables, banking and financial sectors in 2014. They are spending as much as the traditional table-toppers -telecom and auto companies.

     

    TAM Adex data show that the big four e-commerce companies ­ Amazon, Flipkart, Snapdeal and OLX ­ alone spent a staggering Rs 600 crore on ads in 2014. Overall, the sector spent Rs 750-800 crore in 2014 and the budget would cross Rs 1,000 crore in 2015, say media planners.

     

    The big spending has come despite the fact that Amazon started advertising in India as late as in May 2014. But that forced rivals, local leader Flipkart and Snapdeal, to beef up their efforts. In 2014, the sector spent Rs 60-70 crore on print ads, as they vied for premium positions, such as front page, jacket and double jacket ads in newspapers.

     

    The sector spent Rs 32-35 crore only on jacket ads ­ four full pages of advertisement that cover the rest of the newspaper as a jacket.

     

    But, more money has gone to television ads: as much as 50-60% of the total ad spend. While 15-20% of the total was spent on digital, 10-15% went to print media and the rest to radio and out-of-home media. “We expect the spend to go up by 20% in 2015,” said Anand Chakravarty , head of western India operations at media agency Maxus.

     

    The media mix of the sector will continue to be driven by television, followed by digital in 2015, he said, as the primary objective of the players is to build reach and ensure high visibility to garner more investment interest.”Digital drives business performance,” he said.

     

    Foreign investors who saw e-commerce as an opportunity to play in the nation’s mammoth $500 billion retail market have bank-rolled top online retailers’ efforts to scale up quickly over the past few years.

     

    This has also increased competition in the online market, where the players are waging a war to win over the consumer. While the companies have of late cut down on discounts to consumers, they are focusing more on brand building, signing up Bollywood celebrities as brand ambassadors and stepping advertisement activities around sporting events.

     

    The e-commerce sector is expected to spend heavily on the Indian Premier League.

     

    Source:The Economic Times

    Copyright © 2015, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • E-tailer Amazon & Kishore Biyani’s Future Group ink deal to sell goods online, starting with apparel

    Alliance time for Amazon & Future Group

     

    By Sagar Malviya

     

    The world’s largest online store Amazon and India’s largest listed retailer Future Group have signed a deal to jointly sell goods over the Internet amid growing friction between online and offline retailers over heavy discounting.

     

    Future Group will sell more than 45 own labels of apparel initially, followed by in-house brands in the home, electronics and food categories, while the US-headquartered company will handle order fulfillment and customer service for the merchandise on its portal. Both firms will also develop a new line of products across categories to be exclusively sold at Amazon and Future Group’s retail stores. As was reported, that Amazon founder Jeff Bezos and Future Group’s Kishore Biyani met in New Delhi to discuss an alliance.

     

    “The deal is deeper than just transactional involvement with Amazon. We are exploring several synergies in data sharing, co-branding, cross-promotion and distribution network sharing through the partnership,” confirmed Mr Biyani, who has been quite vocal on whether ecommerce firms’ deep discounting strategy makes business sense, suggesting that offering cheaper prices wouldn’t help in the long run. “We are targeting gross merchandise sales of Rs 6,000 crore in next 3 years through the alliance,” he added. The deal comes soon after Flipkart’s Billion Day Sale on October 6 led to protests by traditional retailers that they were being hurt by the alleged predatory pricing.

     

    The complaints by traditional retailers led to the government saying it would examine the policy on ecommerce. Following this, Amazon’s October 10-16 Diwali Dhamaka Week has been a subdued affair with sharp discounts restricted to stock clearances and products only being sold on the site. Under the deal, Amazon and Future will also jointly develop discounting strategy and price tags on their products won’t be very different from rates at stores so that both channels don’t end up cannibalising each other.

     

    In its home market, Amazon had similar alliances with retailers such as Target Corp and Toys R Us in the past decade though both soured over time once the online seller gained scale and attracted other large brands.

     

    Following the India deal, Future Group’s four dozen own brands such as Lee Cooper, John Miller and Indigo Nation will be taken off from other online marketplaces where they are currently being sold.

     

    Amazon’s agreement in India also indicates its aggressive intent to spread itself across many product areas quickly in India – especially foods – a relatively niche category for online retail, which it has only recently entered. In July, the US company announced it would invest $2 billion in India operations that exceeded gross merchandise sales of more than $1 billion within a year of its launch. It completed a year in June this year.

     

    Meanwhile, it was reported recently that Amazon plans to open its first brick-and-mortar store in New York.

     

    The company’s main rivals in India are Bangalore-based Flipkart and Snapdeal, the latter a Delhi-based company that counts eBay, Azim Premji and Ratan Tata as investors.

     

    Together, they have sold goods worth more than $4 billion, with Flipkart alone estimated to have crossed $2 billion. The battle is set to intensify. According to a report by consulting firm Technopak, the $2.3-billion e-tailing market is expected to swell to $32 billion by 2020 and account for 3% of the total Indian retail sector.

     

    In the offline retail market, just three companies – Aditya Birla’s Madura Garments, Arvind Brands and Future Group – either own or sell more than two dozen brands each, thus becoming the preferred options for any online player looking to partner retailers.

     

    The move holds benefits for both sides, but there are pitfalls as well.

     

    “The upside is Amazon getting instant product diversity and capability while Future Group can explore a new channel for sales,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight. “However, if the business is not aligned in terms of orientation and customer service, then it could create issues going forward, especially when one of the biggest barriers for online sale is inconsistency of products.” Future Group has more than 75 own brands that earn it at least 15% higher margins on average compared with national brands, which is why Biyani is bullish on private labels across categories. The tie-up means Future Group’s brands that now have a presence in 98 cities and towns will be marketed to 19,000 PIN codes serviced by Amazon across India.

     

    Industry insiders also said the Indian retailer’s move reflects a bid to expand into new distribution channels such as ecommerce in the search for growth. Last month, Snapdeal agreed to create Croma’s Flagship Store on its ecommerce portal to sell electronics items including mobiles, tablets and laptops.

     

    The $3-billion Future Group, on its part, has opted for SAP’s Hybris OmniCommerce solutions and plans to invest nearly Rs 100 crore to beef up its ecommerce venture. It is targeting about 20% of revenue from online sales over the next 18 months. By 2020, the aim is even higher – at 40% of its sales through ecommerce or virtual platforms.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • While the overall industry was at $1 billion (Rs 6,000 crore) a couple of years ago, just the top three marketplaces in the country-Flipkart, Snapdeal and Amazon-are estimated to cross $4 billion (Rs 24,000 crore) in sales this fiscal

    Online retailers Flipkart, Amazon etc to woo customers with eye-popping deals this Diwali

    By Radhika P Nair

     

    Online retailers, from biggies such as Flipkart and Amazon to niche players like FabFurnish and Bluestone, have lined up special catalogues, exclusive products, offers, contests and discounts to ensure a cracker of a Diwali season, with an eye on first-time shoppers.

     

    Fashion portal Myntra will offer more than 5,000 new products across top brands like FCUK, UCB, Elle, SuperDry, Biba, FabIndia and Antony Moratto for the first time online, while online marketplace Snapdeal.com is working with brands across categories like fashion, electronics and home products to put together a special Diwali catalogue that will be out in the next few days.

     

    Market leader Flipkart will put up exclusive products and offer heavy discounts while rival Amazon.in may introduce drone delivery in the country, as Diwali season is when most number of Indians try out online shopping for the first time. The four to five weeks until Diwali brings the largest sales spike for online sites.”For online retailers, you can say that the financial cycle is Diwali to Diwali,” said Saurabh Srivastava, director at advisory firm PricewaterhouseCoopers (PwC) India.

     

    “Every project cycle and launch that an etailer works on during the year is geared only towards Diwali.” MrSrivastava said sales jump during this season can be double the regular daily order size. Sandeep Komaravelly, senior vice president of marketing at Snapdeal, said that unlike offline, Diwali momentum does not taper off in online retail after the festival.

     

    “New customers who have tried online shopping for the first time during the festival season continue to do so even afterwards,” he said. No wonder then that portals big and small are going all out to woo new customers, backed by large marketing campaigns.

     

    “For large e-tailers the marketing budgets will be as high as 10% of overall costs,” said PwC’s Mr Srivastava. Even niche jewellery site Bluestone has set aside Rs 6 crore for advertisement and marketing for the festive season. It will launch a consultancy feature for Diwali that will suggest jewellery items based on the user’s face, hair style and likes.

     

    The typical Diwali shopping season starts from third week of September and goes on until Bhai Dooj, two days after Diwali. The online retail industry has grown rapidly in the past few years. While the overall industry was at $1 billion (Rs 6,000 crore) a couple of years ago, just the top three marketplaces in the country-Flipkart, Snapdeal and Amazon-are estimated to cross $4 billion (Rs 24,000 crore) in sales this fiscal.

     

    Ganesh Subramanian, chief operating officer at Bengaluru-based Myntra, which was acquired by Flipkart earlier this year, said it’s setting up a special Diwali store on its site. The company has started a new warehouse in Gurgaon in time for the peak shopping period.

     

    “We expect a lot of interest from tier-II and III cities and towns thanks to mobile. At least one out of two orders will be through mobile,” he said. Myntra is targeting sales of Rs 2,000 crore this fiscal.

     

    Flipkart plans a single-day big-bang sale a few days before Diwali with new and exclusive products at big discounts, said a person with direct knowledge of the site’s Diwali plans. It will also launch exclusive brand partnerships-around one a week-as part of its Diwali line up.

     

    “The company is expecting the largest sales in its seven years of existence,” said the person who did not wish to be identified. Flipkart declined to participate in this story. Samir Kumar, director of category management at Amazon India, said the portal will have exclusive launches and innovative gifting options. Amazon could also do drone deliveries in India during the period, as reported earlier. The company declined to speak on this.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • How Flipkart & Snapdeal are preparing to deal with onslaught from global retailer Amazon

    Ready to take on Amazon

     

    By Rahul Sachitanand

     

    Eleven months ago, India’s e-commerce sector got an ominous warning of a sleeping giant’s rise. Amazon, the $74.5-billion giant, which had been quietly watching the local market grow from $2.5 billion in 2009 to $16 billion in 2013, according to industry lobby Assocham, decided to make an understated entry.

     

    Even as its largest Indian rival, Flipkart, was cruising towards a billion dollars in revenues and another, Snapdeal, was making similar intentions known, Seattle-based Amazon made a low-key foray. It launched in a couple of categories – books and movies and TV shows – with firm plans to take a large bite of a market expected to reach up to $56 billion by 2023. Amazon has been quick off the blocks.

     

    Since its launch in June 2013 (it launched Junglee India, an online comparison engine in 2012), the company has gone from two categories to 24, from zero sellers on its marketplace to around 1,000.

     

    Amazon has been on the move, not only by launching category after category, but pushing the envelope on other fronts. It was the first to launch next day and same day delivery; it innovated by piloting deliveries at HPCL and BPCL outlets and even dropping off packages at small kirana stores in select locations.

     

    “We believe that the growth is at an inflection point and there is tremendous opportunity,” says Amit Agarwal, vice-president and country manager, Amazon India. “India is a large opportunity from a consumer and service standpoint to create differentiation and we were ready when we launched to take advantage of that.”

     

    Amazon is dead serious about the Indian market. It spent nearly $3.5 million on lobbying in 2013, according to filings to the US Senate, including efforts to push through foreign direct investment in retail. In the first quarter of this calendar year it again spent around $1.5 million to press its case.

     

    Junglee , meanwhile, has emerged to be India’s No. 1 comparison site with over 30 million products, over 1,900 online sellers and over 80,000 local sellers. Even as the global giant goes to battle, its two largest rivals aren’t prepared to be sitting ducks.

     

    Sachin Bansal

    According to industry insiders, the battle is evolving into an Amazon vs Flipkart one, with Snapdeal as a scrappy third rival. Sachin Bansal, CEO and co-founder of Flipkart, has had a firsthand view of Amazon’s global adventure, as a software engineer for the web giant for nearly two years between 2006 and 2007.

     

    It was this stint that convinced him to team up with IIT Delhi batchmate Binny Bansal, to start an online book selling venture in 2007 that began in a rudimentary 800-sq ft office and grew into a billion dollar online hypermarket, with over 100,000 shipments a day for products across some 20 categories. Today, Sachin Bansal is preparing to go to battle with the company he ardently admires.

     

    “We are prepared to take on global rivals,” he says. “We are strongly customer-focused and we believe we have the best logistics, supply chain and technology in the industry.”

     

    This strong focus has helped Flipkart. The company, which has raised $550 million from marquee investors such as Tiger Global and Accel amongst a host of others, started off as an inventory-led e-retailer but transitioned into a full-fledged market place, lining up an assortment of 4,000 sellers in its quest for $1 billion in revenue.

     

    Having reached that landmark (a year before its expectations), Sachin Bansal believes that the next battle will be fought not on computers and broadband connections but over mobile broadband users. “In our next stage of evolution, we want to be recognized not as an e-commerce company, but as an m-commerce company,” he says.

     

    The firm is rapidly adding sellers and expects to rapidly increase this to up to 15,000 sellers in the next year. Flipkart’s switch from an inventory-led company to a market place was hardly trouble-free. The firm struggled with plunging customer satisfaction, quality issues and logistical headaches as it faced up to an exponentially larger business.

     

    More recently, it found itself in hot water for allegedly violating the Foreign Exchange Management Act to the tune of Rs 1,400 crore. While this investigation by the Enforcement Directorate dates back to before April 2013, when it switched to the market place model, Flipkart says it had broken no rules even back then.

     

    With Amazon making its presence felt in the fast-growing Indian market, its largest domestic rivals know they need to act and act decisively. The market has been through several rounds of churn, as VCs initially chased opportunity in the market, only to see many of their investments crash and burn.

     

    According to estimates from NextBigWhat, a website focused on entrepreneurship, 136 e-commerce firms shut shop between November 2012 and April 2013. According to other data from Allegro Capital, an investment banking boutique in Bangalore, 80 per cent of all Indian ecommerce companies are on their last legs, having failed to raise fresh funds.

     

    Between 2010 and 2013, 52 e-commerce firms raised some $700 million in funding, but just 18 of them attracted a follow-up round. In the past year to 18 months, there has been a substantial clear-out in India’s e-commerce space, as investors have been wary of investing in this space, either backing largescale players such as Flipkart or putting smaller amounts into high-margin niche start-ups.

     

    The Other Challenger

    Snapdeal’s co-founder and CEO Kunal Bahl says that with their initial focus – on group buying – the company risked being swept away in this tumult. Instead, Snapdeal pivoted from its early focus to also become perhaps India’s largest marketplace with some 20,000 sellers on its platform. Now, Bahl claims, the firm is on track to clock revenues of $1 billion – within five years of starting up.

     

    “When we launched in the group buying segment, we were the seventh player and in six months there were 50 more rivals jockeying with us,” says Mr Bahl. “We got 70 per cent market share in 14 months and, when we decided to change business strategies, our idea was called ridiculous, stupid and dumb.”

     

    Despite the criticism, the founders of Snapdeal persisted and, backed by funding from the likes of eBay, today claim they are months away from clocking revenues of $1 billion. “Had we run an inventory business, we would have been a distant follower,” says Mr Bahl.

     

    “From being six steps behind in the race, we went to being four steps ahead.” He points out that from an overcrowded market of some 800-1,000 companies in 2011, only a handful survived and Snapdeal’s decision to pivot its business model helped it be one of them. “We have five million products on our site and we’re adding a new product every 30 seconds.”

     

    Mr Bahl wants to face up to Amazon’s might and is confident of putting up a strong fight. Despite the aggression of its domestic rivals, Amazon’s Agarwal is unmoved. “There is significant potential for innovation to improve customer experience,” he contends. “While Indian e-commerce is growing rapidly, it is still in nascent stages. It’s truly Day 1 for e-commerce in India and we are committed to aggressively invest over the long term and relentlessly focus on earning customer trust.”

     

    Rather than building a monopoly in India, he admits there is space for multiple formats and players here. “We are going to relentlessly focus on expanding our selection, bring significant cost savings, provide fast and reliable delivery, and raise the bar for online shopping experiences in India, much like we have done everywhere else in the world,” adds Mr Agarwal.

     

    Despite Amazon’s swagger, Flipkart isn’t easily intimidated – Bansal the CEO is working overtime to keep the fires going. When ET Magazine spoke to him in Bangalore, it was his wedding anniversary and he spoke to this writer in between attending a public function and before getting to other official meetings and calls. “We are constantly thinking of new ways to grow the business,” he says.

     

    “In a few years we want to go from a few thousand sellers to millions of sellers on our platform.” Flipkart can expect some stout competition from Amazon in this race to accumulate sellers. “We offer the most comprehensive suite of options for sellers to grow their business online and make profits in India,” boasts Mr Agarwal of Amazon. He points to solutions such as Fulfilment by Amazon (FBA) service, a pay-as-yougo fulfilment service, as enticements for sellers, wherein Amazon takes care of packing, shipping and delivery of sellers’ products.

     

    “We strive to do the heavy-lifting on their behalf while they focus on their core business functions,” adds Mr Agarwal. Today over 75 per cent of units shipped are FBA. Over 200,000 products are available for next-day delivery on Amazon. Over 60 per cent of existing demands are already eligible for next-day shipping.

     

    Amazon isn’t holding back in its pursuit of both sellers and buyers. Another initiative it is aggressively rolling out is Amazon Easy Ship, an assisted shipping service that makes it easy for sellers to ship products across India. With Easy Ship, after order confirmation, sellers pick and pack the shipment, confirm to Amazon that they are ready to ship and Amazon collects the shipment and ensures that the product is delivered to the customer.

     

    Sellers benefit from low shipping rates, COD and pre-paid orders, scheduled pick-ups, faster delivery and automated shipment tracking. Experts feel that India’s e-commerce industry has reached an inflection point. “Amazon’s entry has bought some urgency and competition into the market,” says Pragya Singh, associate vice-president, Technopak, an advisory firm.

     

    According to her, the arrival of Amazon will likely catalyze a further consolidation in the market, which will see the emergence of three or four large Indian players and a long tail of high-margin speciality players in categories such as apparel, accessories and jewellery.

     

    “With electronic retail accounting for barely 1 per cent of overall organized retail, there is plenty of headroom for growth,” adds Ms Singh. It is this headroom that both Flipkart and Snapdeal are chasing, with varying strategies. Analysts and investors say that Flipkart has built a stronger brand for itself due to its stronger urban reach and positioning, while Snapdeal is stronger in the hinterland.

     

    Flipkart is also the more valuable of the two – it was valued at $1.6 billion in its last round of funding – compared with $400 million for Snapdeal (as in February). Both Flipkart and Snapdeal are bulking up with an eye on the future.

     

    Flipkart’s chief executive Mr Bansal told this writer in a previous interaction at the headquarters in Bangalore that the firm was open to inorganic growth. One such deal may shortly come its way, as it seeks to nail down a protracted deal for Myntra, a provider of fashion and apparel online. While the deal appeared to be progressing on schedule, at least two investors said the Myntra team balked at a final valuation.

     

    To try to have the scale to compete with Amazon, Snapdeal too is keen on inorganic growth. Most recently it acquired Doozton, an online product discovery firm, to expand its presence in apparel and fashion. Previously, it acquired Grabbon, Esportsbuy and Shopo to expand into areas such as sports equipment and Indian handicraft and strengthen its presence as a full-fledged e-commerce market place.

     

    “We are accelerating before takeoff,” says Mr Bahl of Snapdeal. “E-commerce is going to be a $100-billion industry in the next 10 or 15 years and we need to stay nimble and scrappy and pick our battles.” Even as both companies add muscle to their businesses inorganically, the real scale may come the hard way – from adding new categories and products to their baskets.

     

    For example, Flipkart has rolled out a range of furniture and wants to expand its presence in white goods. Snapdeal too is constantly ramping up several categories – including some unexpected ones such as car tyres where it is seeing strong sales.

     

    “People are buying sets of four tyres worth Rs 40,000-50,000 online,” says Mr Bahl. It also stocks 600 types of air-conditioners, 300 varieties of refrigerators and 400 water coolers from an assortment of sellers. Ms Singh of Technopak thinks that the e-commerce industry is graduating from one where companies are relentlessly chasing consumers to the next phase, where companies focus on value-added services such as supply chain and logistics and on how to retain customers, rather than spend precious money on lassoing new ones.

     

    Having been beaten to the punch by Amazon, Flipkart and Snapdeal are both hoping to make up for lost time with their competing offerings on this front. “Value-added services will be the next big battle in India’s e-commerce market,” says Mr Bansal of Flipkart. The firm, which launched eKart, its in-house logistics arm around a year ago, is now preparing to offer its services to third parties.

     

    Even as Flipkart, Snapdeal and the rest of India’s e-commerce industry fortify themselves against Amazon, the multinational behemoth is setting itself to face the onslaught. “We are committed to the India market and we continue to invent and invest on behalf of customers,” says Mr Agarwal of Amazon India.\

     

    “With Amazon.in, we endeavour to build the most trusted and convenient shopping experience.” With revenues north of $200 million, according to industry estimates, Amazon India may have already laid down a daunting gauntlet for its Indian rivals.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Amazon lures online retailers from Indian rivals Flipkart and Snapdeal expanding range for same-day delivery

    It’s Amazon v/s Flipkart & Snapdeal

     

    By Radhika P Nair & Aditi Shrivastava

     

    Amazon India is casting a snare to draw more small merchants into its fold as it battles India’s top online retailers Flipkart and Snapdeal for supremacy in the country’s booming ecommerce industry. Beginning Wednesday, merchants can sell their wares on the same day they register on Amazon’s portal compared with the nearly two weeks it takes on competing platforms.

     

    The world’s largest online retailer is also expanding the range of products that will be delivered to customers within a day, displaying the trademark aggression that marks its global operations nearly 10 months after launching services in India.

     

    “A few thousand sellers have already registered for the new service,” said Amit Deshpande, a director and general manager at Amazon India who said the company already has a roster of 4,000 sellers.

     

    These moves, coming days after the company launched a high-voltage advertisement campaign including television spots during the current edition of the Indian Premier League, is aimed at getting the largest number of merchants and the widest variety of products for Amazon customers.

     

    “Amazon is moving from first gear to fourth,” said Arvind Singhal, chairman of retail advisory Technopak. “They have the basics in place.”

     

    Amazon is Trend-Setter

    Market leader Flipkart, which just reached the milestone of $1 billion (over Rs 6,000 crore) in sales, also has about 4,000 sellers on its marketplace. But it follows an invite-only model to sign on sellers which is more time-consuming.

     

    “Even though I am already a seller on Flipkart, if I need to add a new category it will take about two weeks to start selling,” said Eshan Arif, 24, co-founder of Bengaluru-based music and movie merchandise store Hysteria. For a first-time registration it takes about three weeks from signing up to a live listing. Flipkart declined to comment for the article.

     

    Industry estimates peg Amazon India’s sales at over $200 million (Rs 1,200 crore) although the company declined to share sales numbers. At current growth rates, Amazon is capable of clocking sales of $1 billion (Rs 6,000 crore) by the end of March 2016.

     

    This will make Amazon the first online retailer in India to reach the magic number within three years of launch. Flipkart, which reached the milestone in March this year, took seven years. Snapdeal, launched in 2010, expects to reach $1 billion in sales this year.

     

    Snapdeal did not respond to email queries. Merchants who do business with all the top Indian portals said Amazon has taken a lead in categories including books and watches and is set to duplicate it in jewellery and baby care.

     

    The company’s latest delivery service, ‘easy ship’, will allow sellers to ask for a product to be picked up and shipped by Amazon. It will also provide cash-on-delivery for these sellers’ orders, an option so far available only to those who stocked products with Amazon. The service, which has 400 sellers already registered, will be available in 30 cities to start with.

     

    “We now have a complete suite of services for sellers which will help them sell more and make more money,” said Mr Deshpande, who has been with the company since 2010.

     

    This is just the latest in a string of initiatives from the Seattle-based company that is stirring up the Indian online retail industry estimated at $3 billion (over 18,200 crore).

     

    Last December, Amazon launched in-a-day delivery service forcing Flipkart and Snapdeal to follow suit. Flipkart and Amazon also launched their Apple iPhone and iPad applications within a day of each other. “Amazon is forcing Flipkart to push ahead with its customer and seller services,” said Ashish Jhalani, head of advisory services firm eTailing India. In Delhi and Mumbai, Amazon.in is piloting pick-up services where customers can pick up their orders from In & Out stores located at BPCL petrol stations.

     

    “Amazon is pretty much the trendsetter,” said Mahesh Murthy, founding partner at early stage venture fund Seedfund. “When Amazon started charging for delivery, Flipkart did the same.” Industry experts said Amazon India has done right by first focusing on backend processes instead of blindly chasing customers upon entry. “They built the logistics network, warehouses and built up a large selection of products that is helping them win customers now,” said Technopak’s Singhal.

     

    The company now has about 1.5 crore products listed on its site and two warehouses, each measuring over 150,000 square feet, in Mumbai and Bengaluru.

     

    Earlier this month, Flipkart said it had millions of products across 21 categories and 40 sub-categories. At peak times, the Bangalore-based company ships 1.3 lakh products a day.

     

    Amazon said its strong backend infrastructure is helping it scale up fast. “When we decide on areas of focus, we always work backwards from the customer,” said Mr Deshpande of Amazon.in. “Selection, delivery experience, logistics, payments and website experience are areas we are super-focused on.”

     

    Customers are taking note. “I used to buy books from Flipkart, but now I buy from Amazon.in as I see better variety there and it is the same price if not cheaper than Flipkart,” said Shradha Patnaik, 24, a communications professional who lives in Delhi.

     

    Merchants too are happy with their experience on the site. “Margin cut at Amazon is about 6-7%, compared with 10-12% at Flipkart,” said Hysteria’s Arif.

     

    While these indicate that Amazon is chipping away at the fortress that Flipkart has built, overtaking the market leader will take some doing.

     

    While prices in categories such as books are similar or Amazon.in is cheaper, in areas such as mobiles and tablets, Flipkart is cheaper in most models and brands. Flipkart is able to do this as WS Retail, a seller on Flipkart, is its subsidiary and gets most of its inventory directly from brands.

     

    “Flipkart’s WS Retail also buys outright from us and accounts for about 80% of our volume on Flipkart,” said Vivek Prabhakar, co-founder of design merchandise firm Chumbak, for whom online sites account for 18% of overall sales.

     

    Experts too believe that Flipkart has been able to fight back, for now. “Flipkart has the people and has built processes and technology. They are fighting back powerfully,” said eTailing’s Jhalani.

     

    Many believe the battle will only truly begin when Amazon.in launches apparel. Flipkart is believed to be in talks to acquire rival fashion portal Myntra to shore up its defences.

     

    Amazon, which launched other fashion categories lately, the most recent being shoes, is expected to launch apparel in the first two weeks of May.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish