World’s Largest Online Retailer to Target India

March 19, 2016


Amazon, the world’s leading e-commerce platform, has set its eyes on the second most populated country in the world. Still a budding market for online retailing, yet already huge, India represents a great deal of opportunities and potential for growth. Amazon has taken many initiatives to boost its competitiveness in the Indian market, especially since it is battling local grown e-commerce platforms such as Flipkart and many others.

Not only in the business of online retailing, Amazon is an international e-commerce company that offers various services such as online computing, digital content, and groceries. It’s online retailing business is, however, its biggest.

Amazon is the world’s leading online retailer in terms of sales value with over US$100 billion in 2015. The majority of the company’s revenue is generated through the sales of electronics and other products. With over 300 million active users worldwide, Amazon is considered one of the most valuable brands in the world.


India: An Emerging Market for E-Commerce

India’s purchasing power in the region is second only to China’s. In fact, the Asia-Pacific area as a whole is now responsible for over a third of the global online retail market.

Having just recently been born, the Indian online marketplace has achieved tremendous growth. Valued at just over US$2.3 billion in 2012, it has grown eight-fold in just over 3 years to be worth US$17.5 billion. But despite impressive numbers in terms of value and growth, The country’s online retail sales are estimated to be just 0.9% of India’s total retail.

Currently the third largest online retailer in India with 18% market share, Amazon has had some difficulty in challenging India’s homegrown retailers FlipKart and SnapDeal. This is one of the main reasons why Amazon is making these initiatives to strengthen its presence in the Indian market.

However, Despite not being the leader in terms of market share, Amazon still has themost valuable retail brand in India. The worldwide exemplary performance of Amazon in the field of online retailing has been beneficial to its operations in India, and a recent survey has shown that it is the most trusted retail brand in India, topping both of its competitors with higher market share.

As per the industry experts, this is one of the best things that the company has going for it, and should help Amazon overcome its local competitors not only in India but in the entire Asia Pacific region.


Becoming Number One

Recognizing that the low penetration of online trade is due to a lack of infrastructure and access, Amazon is trying to be more involved in other processes besides providing an online platform. It will soon launch a digital wallet through acquisitions of existing local companies, which is expected to lead to more purchasing being made.

Amazon is following in FlipKart’s footsteps, as India’s leading online retailer just launched its own digital wallet a week ago named FlipKart Money.

A few weeks back, Amazon announced plans that it will be opening a new delivery center – the largest outside of the US – in the capital city of India’s Telangana state, Hyderabad. This is just one part of the move to bolster its Indian operations to capturewhat many are calling the “second China”.

Acknowledging that the same approach will not work everywhere, Amazon has adapted its approach to appeal to the general Indian consumer more. It has decided to set up a delivery team completely run by women to give Indian women an entry into a growing field dominated by men.

The company will not stop here with its efforts at empowering women in India. Joining the many companies and NGOs that are pushing for financial independence for women, Amazon is looking to offer self-defense classes and special hotline number for women.

With over 4 billion people and rapid economic expansion, Asia will be the main driver of growth in the 21st century. InvestAsian’s goal is to help our readers invest in and profit from the rise of this dynamic region.

Tags: amazon, asia, e-commerce, india, investment, online, online marketplace, retail
Posted in Asia, Private Equity, Private Equity