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Amazon’s entry – A community for online kiranas

, August 8, 2013, 0 Comments

Long awaited online retail giant Amazon has finally landed in India after testing waters recently through its online shopping service Junglee. Known for speedy shipping and infallible customer service, Amazon is known for influencing online retail trends worldwide. Selling online is a complex business that requires careful detail to everything from the moment a customer enters your portal until they receive and are satisfied with their online order. Executing this in an over-populated country with flaky shipping is just the icing on the cake of problems in online retail.

In recent months, the so-called popular Indian retailers have made significant changes to business models flipping them around to create exciting online marketplaces that  now include third-party sellers (a move that was practically non-existent until Amazon came out with Junglee).

What this means to competitors
Amazon’s entry could be a threat in time to competitors, mainly to those in the business a long time.  While many entrepreneurs have had to work their way up to build trust in customers, Amazon comes with a brand image that reeks secure processing and shipping even before it sets foot in the market.  This makes a great platform mainly for small retailers who can sell their products through Amazon. As long as Amazon’s processing, shipping and returns are tailored to meet Indian market demands, Indian e-retailers will continue to face fierce competition from Amazon.

What this means to Third- party sellers
Currently, Amazon has a couple of options – one to sell and handle shipping by themselves; the other to sell and have Amazon handle logistics. Majority of the sellers have opted to make use of “Fulfilled by Amazon” the latter option which makes sense as  conquering shipping is one aspect of online retail that many small retailers find difficult to meet. Amazon has a 1.5 lakh sqft fulfillment centre in Mumbai and have nearly 100 plus vendors selling on their site right now. This is great for third-party sellers especially because FDI regulations do not allow online retailers selling multiple brands to sell their own products. Third-party sellers can leverage on Amazon’s technology and expertise in the field and still expand their marketplaces on Amazon.

What this means to Buyers
If not for pricing and reliability in shipping, Amazon would be nothing but just another online retail portal. Indian consumers are known their for their price-conscious behavior. Only time will tell if Amazon will have an impact on Indian consumers. While Amazon’s experiment with Junglee has mapped out Indian consumer patters to a certain extent and may hold up well in setting up the Amazon marketplace in India, Amazon currently only sells a few product categories. To buyers, Amazon’s entry would mean competitive pricing, better shipping and return policies all over the country.

We foresee Amazon becoming an online community marketplace for small retailers who find it difficult to sell amidst other retail giants such as Flipkart and Jabong. Amazon’s technology is far ahead of many others in the market today. We can definitely look forward to a serious facelift to online retail in India in the coming years. Threat or not, Amazon’s entry could mean a better online retail experience for both the consumer and the seller.

About author
Divya Ramamoorthy is a graduate from Madras university and a post-graduate (MBA) from Jain Group of Institutions- Bangalore, India, based in San Francisco Bay Area, United States. Divya area of expertise revolves around creating careers, identifying talents, recruiting and assisting people . she is also currently enrolled in a certificate program in human resources with the University of California, Santa Cruz. ...more ...more