Feedback
A pioneer B2B media and publication platform connecting with Fashion Brands & Retail in India

India’s e-commerce competition heats up as Reliance joins the race

Indias e commerce competition heats up as Reliance joins the raceThe Indian e-commerce sector, which saw several ups and downs in the past decade, has completely transformed the shopping patterns of consumers. Though the sector’s growth slowed around the middle of last year, it eventually regained pace and grew particularly in Tier II and III cities. This growth was led by two of India’s largest e-commerce giants Flipkart and Amazon who continued to garb the largest pie of India’s e-commerce market.

While Amazon entered the food and groceries delivery space with Amazon Fresh, Flipkart announced a new program FarmerMart that has already become a large threat to existing e-commerce entities even before its launch. The intentions of these retailers is to enter the hyper-local market that’s being captured by the likes of Swiggy, Grofers, and BigBasket at the moment Additionally, Amazon has also acquired a stake in Future Group’s Future Coupons, which operates supermarket chains like BigBazaar and EasyDay, in what is clearly an effort to grab more consumers from offline-friendly Tier – II and Tier – III cities.

Retailers focus on OTT market

Amazon’s Prime has become one of the most popular OTT platforms in India by providing multi-lingual on-demandIndias e commerce competition heats up as Reliance joins content along with original content, across the country.

Not to be bested by Amazon, Flipkart too announced its own OTT platform this year which plans to stream licensed content from Disney and Balaji. However, Flipkart has taken a different approach from Amazon to help users discover videos easily. It also plans to launch a separate app for the OTT offering in 2020 specially for the smart TV and devices ecosystem much like Facebook Watch.

Flipkart leads revenue growth

Though these retailers adopted a similar route in 2019, Flipkart garnered greater revenue than Amazon. However, Amazon enjoyed a higher growth rate of 82 per cent, while Flipkart grew by 47 per cent. Flipkart led the budget phone segment while Amazon dominated in the premium smartphones segment.

Both these retailers also held their respective festive sales from September 29 to October 4, 2019 during which recorded a Gross Merchandise Value (GMV) of over $3 billion. Flipkart dominated this space with a 60-62 per cent standalone share of the GMV. A large chunk of these sales came from Tier-II cities.

Building strong foundation with new acquisitions

Mergers and acquisitions also ruled during the year as Flipkart built a strong foundation by acquiring Myntra and Jabong. The retailer consolidated users between the two brands by diverting users from Jabong to Myntra before finally shutting down Jabong earlier this month. On the other hand, Amazon relied solely on Amazon Fashion which needs improvements in catalogue and from user experience perspective. Though the retailer was in talks to acquire Jabong back in 2014 but the deal didn’t go through and eventually Myntra acquired Jabong in 2016.

However, even with these developments, things were not smooth for the e-commerce industry in 2019 as the Trade Ministry announced new regulations that disallowed e-tailers from selling products offered by brands they own. This forced Amazon to revamp its online catalogue, with Cloudtail. Regulations like restricting brand sourcing from a single vendor to 25 per cent, deep-discounts, and monopolies with vendors or brands, forced both Amazon and Flipkart to redesign their business model to adapt.

What the future entails

In order to prevent cross-border data flow, regulate taxation, facilitate the growth of the digital economy and stop product counterfeiting, the two retailers need to be flexible in their operations this year. Though they’ve already made significant changes to their operational set-ups, their foray into multiple avenues such as hyper-local deliveries, OTT platforms, e-wallets, compels them to comply with data privacy policies if they wish to compete in one of the largest e-commerce markets in the world – India.

The decade from 2020 to 2030 offers the e-commerce sector an opportunity to tap untapped markets. One of the largest challenges etailers may face is the foraying of Reliance Industries into e-commerce as the company is likely to make heavy investments in order to gain momentum to make up for its late entry into the market.

The Indian e-commerce sector, which saw several ups and downs in the past decade, has completely transformed the shopping patterns of consumers. Though the sector’s growth slowed around the middle of last year, it eventually regained pace and grew particularly in Tier II and III cities. This growth was led by two of India’s largest e-commerce giants Flipkart and Amazon who continued to garb the largest pie of India’s e-commerce market. <p>

While Amazon entered the food and groceries delivery space with Amazon Fresh, Flipkart announced a new program FarmerMart that has already become a large threat to existing e-commerce entities even before its launch. The intentions of these retailers is to enter the hyper-local market that’s being captured by the likes of Swiggy, Grofers, and BigBasket at the moment Additionally, Amazon has also acquired a stake in Future Group’s Future Coupons, which operates supermarket chains like BigBazaar and EasyDay, in what is clearly an effort to grab more consumers from offline-friendly Tier – II and Tier – III cities. <p>

Retailers focus on OTT market

<p>Amazon’s Prime has become one of the most popular OTT platforms in India by providing multi-lingual on-demand content along with original content, across the country.

<p>Not to be bested by Amazon, Flipkart too announced its own OTT platform this year which plans to stream licensed content from Disney and Balaji. However, Flipkart has taken a different approach from Amazon to help users discover videos easily. It also plans to launch a separate app for the OTT offering in 2020 specially for the smart TV and devices ecosystem much like Facebook Watch. 

<p>Flipkart leads revenue growth

<p>Though these retailers adopted a similar route in 2019, Flipkart garnered greater revenue than Amazon. However, Amazon enjoyed a higher growth rate of 82 per cent, while Flipkart grew by 47 per cent. Flipkart led the budget phone segment while Amazon dominated in the premium smartphones segment. <p>

Both these retailers also held their respective festive sales from September 29 to October 4, 2019 during which recorded a Gross Merchandise Value (GMV) of over $3 billion. Flipkart dominated this space with a 60-62 per cent standalone share of the GMV. A large chunk of these sales came from Tier-II cities. <p>

Building strong foundation with new acquisitions

<p>Mergers and acquisitions also ruled during the year as Flipkart built a strong foundation by acquiring Myntra and Jabong. The retailer consolidated users between the two brands by diverting users from Jabong to Myntra before finally shutting down Jabong earlier this month. On the other hand, Amazon relied solely on Amazon Fashion which needs improvements in catalogue and from user experience perspective. Though the retailer was in talks to acquire Jabong back in 2014 but the deal didn’t go through and eventually Myntra acquired Jabong in 2016. <p>

<p>However, even with these developments, things were not smooth for the e-commerce industry in 2019 as the Trade Ministry announced new regulations that disallowed e-tailers from selling products offered by brands they own. This forced Amazon to revamp its online catalogue, with Cloudtail. Regulations like restricting brand sourcing from a single vendor to 25 per cent, deep-discounts, and monopolies with vendors or brands, forced both Amazon and Flipkart to redesign their business model to adapt. <p>

What the future entails

<p>In order to prevent cross-border data flow, regulate taxation, facilitate the growth of the digital economy and stop product counterfeiting, the two retailers need to be flexible in their operations this year. Though they’ve already made significant changes to their operational set-ups, their foray into multiple avenues such as hyper-local deliveries, OTT platforms, e-wallets, compels them to comply with data privacy policies if they wish to compete in one of the largest e-commerce markets in the world – India. <p>

The decade from 2020 to 2030 offers the e-commerce sector an opportunity to tap untapped markets. One of the largest challenges etailers may face is the foraying of Reliance Industries into e-commerce as the company is likely to make heavy investments in order to gain momentum to make up for its late entry into the market.

LATEST TOP NEWS
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10

India records biggest surge in e-commerce retail

India records biggest surge in e-commerce retail

A study conducted by Facebook India and Boston Consulting Group recently recorded the sharpest surge in e-commerce adoption across multiple categories in India compared to other markets, including China, Brazil,... Read more

350 retailers threaten to shutter outlets

350 retailers threaten to shutter outlets

Retailers of around 350 brands including DLF, Ambience Nexus, Pacific Group, Oberoi, Mantri have threatened to shutter outlets in shopping centres if their demands for rent-waivers and new rental agreements... Read more

DFU Live Webinar #3: highlights growing demand for loungewear post Covid-19

DFU Live Webinar #3: highlights growing demand for loungewear post Covid-19

The webinar #3 organized by DFU Publications-DFU LIVE on May 30 on the theme: ‘New Categories Dikhao, Sales Badhao’ (Emerging New Categories for Apparel Retailers, Post-Covid), saw experts stressing on the significant... Read more

Kidswear market to grow at CAGR of 17.9 per cent till 2023

Kidswear market to grow at CAGR of 17.9 per cent till 2023

Euromonitor India predicts, children’s wear market for ages 0-14 years in the country is projected to grow at a compounded annual rate of 17.9 per cent from 2018 to 2023.... Read more

Consumer psyche to witness a paradigm shift post-COVID-19: LIVA study

Consumer psyche to witness a paradigm shift post-COVID-19: LIVA study

For any retailer, it is important to be compassionate towards consumer’s thoughts and feelings. With this in focus, LIVA, an ingredient fabric brand from the Aditya Birla Group alongwith MRM,... Read more

CMAI requests government to levy additional import duty on RMG imports

CMAI requests government to levy additional import duty on RMG imports

The Clothing Manufacturers Association of India (CMAI) has written to the Minister of Textiles Smriti Zubin Irani, and the Minister of Commerce and Industry Piyush Goyal to consider levying a... Read more

India’s activewear market to reach Rs 997.8 billion by 2024

India’s activewear market to reach Rs 997.8 billion by 2024

A report titled, ‘Activewear Market in India 2019’ by ResearchAndMarkets.com, says the activewear market is estimated to reach Rs 997.8 billion by 2024, expanding at a CAGR of ~13.59 per... Read more

DFU Live Webinar #2: Highlights challenges to lure reluctant customers back to s…

DFU Live Webinar #2: Highlights challenges to lure reluctant customers back to stores

The Webinar #2 organized by DFU Publications-DFU LIVE in association with TRRAIN on the theme: ‘Consumer Bulao, Retailer Jitao’ (Spiking Consumption, Winning the Customer Back), saw experts highlighting the challenges involved... Read more

Indian apparel players gear up for the new normal

Indian apparel players gear up for the new normal

With the pandemic impacting both apparel manufacturers and retailers in India, these industry players are preparing themselves for the new normal. Speaking at a recent webinar by the Retail Association... Read more

CMAI welcomes economic package announced by the finance minister

CMAI welcomes economic package announced by the finance minister

CMAI has welcomed the measures announced by Nirmala Sitharaman, Finance Minister, especially those connected with the Government’s support to the MSME Sector – on which she focused on today. According to... Read more

MOST POPULAR NEWS
Go to top

Follow Us On:

Face BookDealersForYou

TWDFUpublications

LNDFUpublications

YouTubeDFUpublications

 Copyright © 2020 DFU Publications. All rights reserved.