Customisation of products key to high sales growth for Amazon
BENGALURU: More than four years after launching, online marketplace Amazon India needs to implement another round of customisation and India-specific services to maintain its flying sales growth, analysts said.
Until late last year, Amazon (Amazon Seller Services Pvt Ltd) looked like it was running away with the e-commerce market before an unexpected comeback by local rival Flipkart.
Now, as the market has shown sluggish growth for the second year in a row, Amazon has lagged Flipkart in introducing business innovations. Over the past 18 months, Flipkart has introduced schemes such as no-cost EMI and product exchange schemes that have helped the firm differentiate its offering from Amazon’s.
Months after Flipkart introduced these schemes, Amazon launched them on its own platform but analysts say that of late, it has been found wanting in introducing incremental innovations compared with Flipkart.
Amazon launched in India only in June 2013, years after Flipkart (2007) and Snapdeal (2010). But after losing out in China to Alibaba Group Holding Ltd, the company ensured that it customised its offerings to suit the tastes and habits of Indian customers. It offered cash-on-deliver, cut the size of its mobile app to suit cheap smartphones that have low storage and little computing power, redesigned its daily deals offering, and tied up with local partners such as India Post to reach far-off areas, among others. On the back of such measures and fuelled by a cash splurge, Amazon quickly became the biggest threat to Flipkart.
Now, the company needs to find innovations that appeal to the next set of customers who are buying things online for the first time.
Some experts tracking online retail in India pointed out that while Amazon will come out with more Indiaspecific innovations over the next few months and years, the online retailer needs to be realistic about the size of the e-commerce market in India and its growth prospects.
“On the face of it, Amazon’s business in India is very different from what they have in their home market in the US. Everything they’ve done in India till now is very India-specific — take a look at Prime, for example. In the US, Prime membership is priced at $100 whereas in India, they are giving away subscriptions at a throwaway price of $8,” said Harminder Sahni, founder and MD of consulting firm Wazir Advisors.
Amazon said it is working on filling customer demand gaps. “We don’t look at it as India-specific initiatives — we look at what customers locally want and how to serve them,” said Amit Agarwal, senior vice-president and country manager at Amazon India.
“You look at the gaps and you look to fill those gaps.”