E- Market Place in India

The vibrant e –market in India has witnessed great volatility in the past few months.  With numerous Indian players competing against each other and with foreign players in the fray, each player is vying for a substantial share of the market. According to Forrester Research, the online retail market in India is only 2% of total retail sales. The market is expected to rise at a compound annual growth rate (CAGR) of 44% to reach $ 75 billion by 2020.

Analysts believe that all the permutations and combinations are being worked out: from changing business models to strategic alliances to broadening of the product spectrum.

According to a report by ASSOCHAM, logistics and infrastructure in   e-retailing becomes the very backbone of the fulfillment network and the basis on which stringent service level expectations are set and met, and customer mind-space among competing alternatives is won. In India, these are arguably the weakest links, and therefore the enhanced need for greater attention and management of these critical functions becomes imperative.

It is to be noted that each product category has its own customized logistics requirements which can alter the balance between inventory and supply chain costs. As a logical consequence to the foregoing thought process, Flipkart is growing its logistics arm E-Kart whereas Amazon India is building capacities with its logistic arm Amazon Logistics.

In addition, Flipkart is also working towards an inventory based model on the lines of Amazon. Amazon, on the other hand, is parternering with local stores, thereby reducing its inventory holding costs. Consequently, the increased sales indicate a win- win situation, for the web store, the concerned brick and mortar store as well as the customer.

Flipkart has been working tirelessly to bring about a radical change in its business domain. With the launch of ‘Billion’, a private brand from the Flipkart stable,it is attempting local innovations to cater to the specific needs of the Indian masses.

Amazon on the other hand is attempting to widen its product offerings by entering into the grocery domain. This move is bound to affect the market share of the local players like Big –Basket, Grofers etc.

According to a study by Forrester Research, Asia Pacific continues to be the largest region for online retail sales. Their data shows that with $681 billion in online retail sales in 2016, China is the largest market for e-commerce globally, followed by the US; but it is India that is the fastest-growing e-commerce market.

Thus we may conclude that there are a plethora of offerings in each market segment in the online marketplace in India.  With the innovative strategies and widening product ranges, the e-stores have a lot to offer. The pricing strategies of the different players need to be carefully examined to derive the best quality products as a customer.

Ms Suchitra Srivastava

Associate Professor

Department of Management Studies