India's e-commerce giants to roll out new strategies in 2018
The New Year will see India’s largest e-commerce businesses Flipkart and Amazon roll out new strategies, each with a different focus, in order to adapt to the ever evolving online retail landscape.
Flipkart, which is widely accepted as the country’s current largest online retailer with Amazon India coming in a close second, will focus on private label goods and seek to promote them in smaller cities. The idea is to tap into the non-metro market with a wider distribution network, products customers in more rural areas are drawn to, and strategies to entice these potential customers.
The year 2017 saw many clothing brands start to tap into the non-metro market and the resounding conclusion was that this market will be the next growth driver for many brands. Flipkart has launched a number of private fashion brands this year and it is private brands that hope to attract customers in non-metros.
Amazon India, however, will work to develop their “Amazon Prime” service which sees the majority of its customers come from metros. They will also explore the market in non-metros but, where 45 percent of Flipkart’s sales already come from small towns and cities, 65 percent of Amazon’s sales come from metros and so it makes sense that they are seeking to further strengthen their presence there.
Amazon’s product categories will also expand and a representative for Amazon India said, "We aim to be the 'everything' store, where customers can find any and all products that they are looking for."
RedSeer Consulting has estimated that mobile phone and fashion categories account for approximately 68 percent of total online sales in India in 2018. This is a decrease compared to 2016 where they accounted for 72 percent of total sales. Moving forward, fashion and electronics will most probably continue to dominate the online market but, as other products are also increasingly purchased, it is not surprising that Amazon is seeking to diversify.
"For the first time, we may see the market leaders following two different routes," opined Rajiv Sharma, a Media and Internet Analyst at HSBC Securities and Capital Markets, India. "It may be no longer about gross merchandise value but more about basics like online shoppers, repeat purchase and growth in new categories and fall in mobile," Sharma wrote in his report, 'India Internet: On the way to India Ecommerce 2.0'.
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