Amazon's Foray into India: Competing in an Emerging Market
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Case Code: BSTR466 Case Length: 14 Pages Period: 2012 - 2015 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.400 Organization: Amazon Industry: Retail Countries: India Themes: International Management, Emerging Markets, Entry and Expansion strategy, Competitive Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Amazon in India
In February 2012, Amazon began testing the waters in India by launching Junglee.com, its comparison shopping site which enabled sellers to upload their product catalog promoted by Amazon. After seeing the promotions on Junglee.com, the buyer could select the product he/she needed and the final sale would happen on the seller's website. "With Junglee.com, we have come up with a single online platform for customers where they can shop from a wide selection of products sold by local and global retailers. We're focussed on improving the customer experience and growing selection, making it convenient for customers to find anything online," said Agarwal.
Amazon launched Junglee.com since 100% FDI in e-commerce was not allowed in India. Though the website did not allow any transaction on the site, it helped Amazon get an insight into the e-commerce space in India as well as to build brand loyalty.....
Competitive Landscape
India was the third largest e-commerce market in the world, next only to the US and China. According to a joint report by KPMG and the Internet and Mobile Association of India, the Indian e-commerce market was worth US$13 billion in 2013, with online travel accounting for over 70% of consumer e-commerce transactions in 2013. According to Forrester Research, online sales of retail goods was US$1.6 billion in 2013. According to Technopak, this was expected to reach US$76 billion by 2021. The major players in India's e-commerce industry were Flipkart, Snapdeal, Jabong, and e-Bay. Local companies had a substantial competitive advantage because of their understanding and focus on the local customer, along with their more established local brand names.....
Challenges
While the consensus opinion among most industry experts was that Amazon was a late entrant into the world's third largest e-commerce market, some analysts opined that launching Junglee.com was a better penetration strategy, especially after Amazon’s debacle in two emerging markets – China and Brazil.
In August 2004, Amazon had entered China with the acquisition of Joyo.com, a Web retailer operating in China, for US$75 million in cash and stock. Amazon had stated that it planned to expand the Chinese operations. Nevertheless it was also aware of the challenges of entering one of the world's largest and most complex markets. "We're happy to be part of one of the world's most dynamic markets," Bezos had said while commenting on Amazon's entry into China...
Looking Ahead
In April 2014, Amazon India announced that sellers could sell their products immediately after they registered on Amazon's e-commerce portal in comparison with nearly two weeks' time on competing platforms. The company also launched 'easy ship' which would allow sellers to select a product to be picked up and shipped by Amazon. The service would also include cash-on-delivery for these sellers' orders. "We now have a complete suite of services for sellers which will help them sell more and make more money....When we decide on areas of focus, we always work backwards from the customer. Selection, delivery experience, logistics, payments, and website experience are areas we are super-focused on," said Amit Deshpande, director and general manager at Amazon India....
Exhibits
Exhibit I: Logo of Amazon
Exhibit II: Amazon's Financial Highlights (2009-2013)
Exhibit III:Screenshot of Amazon India Website
Exhibit IV: Some Competitors of Amazon India
Exhibit V: Comparison Between Three Leading Players in Indian e-Commerce Industry Company
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