The fast-moving Indian e-commerce marketplace heated up considerably with rumors that Walmart is negotiating to invest up to $1 billion in current e-commerce leader Flipkart. While some experts say Amazon is about to surpass Flipkart sales this year, Alibaba also has a small investment in third biggest e-commerce operator Snapdeal and is also looking for a way to build its future business in India. This has more intrigue than the popular TV series Game of Thrones so here’s the latest India e-commerce news and market developments.
Associated Chambers of Commerce & Industry of India (Assocham) estimates e-commerce will reach $38 billion by 2020. Bank of America suggests Amazon will not overtake Flipkart until 2019 as India’s biggest e-commerce company. Amazon is looking to provide incentives for its 200 largest vendors to provide consumer discounts during the Dhiwali festival sales season. As many as 80,000 temporary workers could be hired during the festival sales season by e-commerce companies. With the Indian business to business market estimated at $287 billion, Alibaba and Amazon will battle head-to-head for market share.
Brand consultant Harish Bijoor says e-commerce companies will be building their private label brands in the drive profitability. Five technologies that will drive future e-commerce industry in India include: digital wallets, location-based commerce, mobile apps/mobile commerce, social sharing and deal notifications according to an Indian Department of Industrial Policy & Promotion government report.
Walmart May Invest in E-Commerce Site Flipkart
Wal-Mart Stores is in talks to buy a minority stake in India’s largest e-commerce firm Flipkart, two sources familiar with the matter said, as the world’s biggest retailer aims to get a slice of a fast-growing online retail market.
One of the sources said the U.S. retailer was looking to invest between $750 million and $1 billion in Flipkart, but the final value and size of the stake would depend on the outcome of talks about the Indian company’s overall valuation.
He added Walmart WMT -0.75% and Flipkart were also contemplating a collaboration that would see them leverage each other’s expertise in retail and supply chains in India. Via fortune.com
India’s e-commerce triples in 5 years, despite low Internet use
Although India’s use of the internet is lower than many poorer countries, the country’s e-commerce sector tripled – or grew by 209 percent over the last five years – from $4.4 billion (Rs.20,020 crore) in 2010 to $13.6 billion (Rs.83,096 crore) in 2014.
India’s e-commerce market is likely to reach $38 billion (Rs.252,700 crore) in 2016, according to an Associated Chambers of Commerce & Industry of India (Assocham) report released in January 2016.
The online retail sector in India is expected to be a $1 trillion (Rs.660,000 crore) market by 2020, according to a recent report by the Confederation of Indian Industry (CII) and Deloitte, a consultancy. The study indicates that more e-commerce will trigger big innovations in India. Via americanbazaaronline.com
Amazon will not beat Flipkart in ecommerce till 2019: study
E-commerce in India is growing wider and deeper every day. More players are coming up in verticals and horizontals, but the early beginners continue the stronghold. According to a new study by Bank of America’s investment banking division, India’s largest online marketplace Flipkart will continue to be the number one e-commerce player in the country, at least till 2019.
The Bengaluru-based firm, currently valued at approximately $9 billion, is estimated to have 44 percent GMV market share in 2019 while its rival Amazon will take 37 percent, up from 21 percent in 2015. Currently, the Flipkart app has had 50 million downloads, while Amazon has 10 million.
The Bank of America Merrill Lynch study adds that India will be the second largest market for Amazon outside the US, while Snapdeal will fall to 9 percent by 2019, from 14 percent in 2015. In fact, Amazon had overthrown Snapdeal in terms of sales a year ago. In the last two months, they have reportedly also beaten Flipkart in sales. Amazon GMV in 2025 will be $81 billion according to the report, which also states that it will generate $5.5 billion in GMV in 2016. Via yourstory.com
Amazon, Flipkart line up incentives for vendors ahead of Diwali battle
Amazon India is targetting an eight-fold rise over its average monthly sales in October as the festive season battle with Flipkart builds up in the first big test for online retailers after rules on discounts were changed.
Amazon plans to financially incentivise the top 200 spenders among its sellers, wanting them to splurge at least three times more than the monthly average on advertising and promotions to attract customers, said four industry executives with direct knowledge of the developments.
Rival Flipkart is also on the job. It’s asking sellers to offer additional discounts to listing prices on a random day in September to ensure that product rates aren’t jacked up just before its Big Billion Days sale starts, they said. Via economictimes.indiatimes.com
Ecommerce companies like Flipkart, Snapdeal and others shopping big time for temporary staff
Ecommerce companies are driving demand for temporary staff this festival season, accounting for as much as 60 per cent of the short-term jobs being created, as they go on an overdrive to win market share in the most lucrative few months of the year. Brick-and-mortar retailers as well as consumer durable and telecom players are also hiring staff on a temporary basis.
Flipkart, Snapdeal, Amazon, LG, Samsung and Panasonic are among the companies that are set to ramp up temporary workers by up to 35 per cent to see them through the expected surge in demand. The trend is gaining steam in smaller towns as well, and most of the staff demand is in sales, logistics and customer support.
“Hiring in the ecommerce industry has become more skewed towards season. We see an increase in demand as well as compensation by 10-12 per cent compared to last year,” said Guruprasad Srinivasan, president, people and services at Quess Corp. According to estimates, between 60,000 and 80,000 temporary jobs would be created in the organised sector alone this festival season while the unorganised sector would hire more. Via indiatimes.com
Amazon and Alibaba is going to battle for India’s B2B e-commerce market
For several years, Amazon, an American e-commerce and cloud computing company which is based in Seattle, Washington, and Alibaba, a Chinese e-commerce company that provides consumer to consumer, business to consumer and business to business sales services via the web portal, have been competing in the online consumer retail arena. Now, the two online behemoths are going head to head for India’s business to business segment of the burgeoning e-commerce industry specifically the Rs19.13 lakh crore which is worth an estimated $287 billion.
Jeff Bezos, the founder, chairman and CEO of Amazon.com, had set up the wholesale arm, ‘Amazon Wholesale’ in India that runs the company’s B2B portal, amazonbusiness.in back in 2013 which is infused with the Rs115 crore.
As for China’s Alibaba Group Holding Limited, its portal has been operating since 2007 and has more than six million registered Indian buyers and sellers. They have also recently announced that the company has signed up with new partners in India, including, Kotak Mahindra Bank, IDFC Bank, logistics startup Delhivery, DHL, and Aditya Birla Finance, as a means to ensure a more efficient and lower cost service for its sellers. Via hngn.com
E-commerce companies chase private labels
E-commerce firms are looking at private labels to boost business, mirroring a move that offline retailers such as Shoppers Stop and Big Bazaar made in the past.
Myntra, the Flipkart-owned online fashion portal, owns brands such as Roadster, Mast & Harbour and HRX, which make up around 25 per cent of its sales. It says it will be among the first e-tailers in the country to become profitable, boosted by the higher margins it earns from private labels.
“E-commerce companies are realising that they have to enjoy larger margin structures. They are now turning to having their own range of items. This will give them larger margins as well as help them make their brand names stronger,” said brand consultant Harish Bijoor. Via business-standard.com
E-commerce boom drives affiliate marketing firms
The market for affiliate marketing is booming. Consumers are warming up to the idea of discount coupons and cashback when they shop online.
Five years ago, global data-driven marketing and loyalty analytics firm Aimia wanted to enter India in collaboration with a renowned Indian business house with interests in retail, among other things, to launch a loyalty programme in this market. However, its effort came to naught and eventually it had to abandon its India plan. Aimia is the Canadian customer loyalty firm that operates programmes (Aeroplan and Nectar) in various countries.
Two months ago, Aimia returned to India after tweaking its business strategy. This time, it launched Nectar as an affiliate marketing programme for e-commerce firms. Nectar functions as a shopping assistant to consumers and aggregates multiple online retailers to showcase their products and prices. Consumers find the best price and earn points to redeem vouchers or coupons with online retailers.
According to Swati Bhargava, co-founder of affiliate marketing firm CashKaro, several new forms of affiliate marketing have gained popularity. “For example, there are bloggers-turned-affiliate marketers, price comparisons, product discovery and cost-per-lead campaigns, among others, which have helped affiliate marketing evolve,” she says. Via livemint.com
5 technologies that will drive future e-commerce industry in India
The Indian e-commerce industry is one of the most progressive sectors in the country. This sector has not only changed the way people interact with local and global businesses, but has also changed the face of business transactions. It is true that the online market in Indian is not as widespread as those in the UK and US, however, it is growing at a very fast pace.
According to a report released by Department of Industrial Policy & Promotion of India, the Indian e-commerce market is likely to grow ten times and reach $100 billion by 2020.
Amitabh Kant, the former DIPP secretary stated, “India in the next 10 years, in my mind 10 years, would be close to $250 billion of e-commerce”. With the way the Internet is growing as well as how dependent people are on their smartphones, e-commerce has a very important role to play in India’s future. Via in.techradar.com
Next week, we’ll highlight EU e-commerce, the US retail update and more on Asia news and developments. Have an enjoyable weekend!