So Amazon found a brilliant way to enter the Indian market. As far as I understand, they manage the inventory, sell the inventory, deliver the goods, take payment – everything except owning the inventory. This allows them to be present in India without breaking the rules.
Flipkart, Snapdeal, Jabong and many others have been bleeding cash overall hoping that they will crack the market. So far VCs have paid for that cash bleed but how long can this continue? Amazon has a $ billion balance sheet and can manage this cash bleed for probably longer than these firms.
So the question comes down to this –
Is there enough customer loyalty in India to incentivise takeovers? Have companies like Flipkart made enough brand equity or is the consumer fickle?
Have these companies made enough in infrastructure and logistic investment to be acquired? Would be great to know your point of view …
Sahil
Hi Shubham,
Well Amazon inventory based model might or might not gear up as in INDIAN market there are lot of logistics and supply chain challenges. Considering Indian customers loyality – they are more likely shop online for many reasons with Flipkart and other giants:
1. Easy Navigation 2. Emotional bonding with Flipkart etc. trust and more important re-shoppers.
Simple example: In india more of emotional marketing works rather than any mantra. Look at LUX, COLGATE and VASELINE, SURF, COKE. None could ever replace them in INDIAN MARKET and all the offer and maintain is emotional touch.
But yes as you rightly said they have huge balance sheet- Indeed that can turn the table round. Stay tuned to see mergers soon!!
Sanchita Dutta
We are registered with Flipkart as well as amazon as amongst the initial lot of sellers who were invited to set up shop there a few months back and we have built up listings in both the places. While in case of Flipkart, the model is identical to ebay wherein they will keep a cut of the transaction while we would ship the items ourselves. this suits well since this is what is being followed with ebay with which most sellers like us are well versed with.
Now coming to Amazon, i did read that they will stock the inventory. However we have not been asked to hand over any inventory with amazon. If we are asked we will immediately pull out. Its very convenient of Amazon to stock and send items and charge a fee for warehousing plus a cut of transaction while we sellers lose out in terms of capital block, price fluctuation risk, unsold inventory and obsolescence. it would SIMPLY NOT WORK. but we are not sure since we have not been asked anything by amazon
Also observed that most large sellers of ebay (atleast in categories that we operate in ie IT &Mobile) have also set up shop in flipkart and amazon and are already doing good business. Flipkart has played smart by inviting only the very large sellers of ebay to join them ( something like 3000+ feedbacks). this will ensure only serious sellers are onboard with them while ebay continues to grapple with casual sellers and dwindling sales on account of twin attack from flipkart n amazon.
While we are set to start selling on flipkart, the rumours in market about their delicate financial health keeps us on the tenterhooks. while many would say flipkart is too big to fail, once in actively, we would have our 1-3 lakhs with them in rotating capital which is not insubstantial.
For now, we are selling only on ebay and through our own website http://www.indiacod.com. As the visibility improves, we would get active on the other two
Sanchita “Hometrepreneur” Dutta
Ebay Seller Accounts: gizmobhai, indiacod, http://www.indiacod.com
Ankit Sawant
Hi Shubham,
Amazon surely has a strong balance sheet but their real strength lies in their shareholders. If you see the Q1 numbers of Amazon they have made a profit of around $ 81m on sales of $16b. Now these profit margins are too low. Someone like Apple makes a profit of around $3-5 b on such sales numbers.
Unlike shareholders of other companies the Stock of Amazon doesn’t tank of such numbers. Amazon’s stock is like the Reliance Stock of early days. Such a strong hold and quite less proportionality with numbers help Amazon to try new stuff.
Amazon has been experimenting with hardware like Kindle tabs, etc and on various other fronts. Flipkart does have customer loyalty in India but Amazon would surely make it’s base with the upper end of the segment who own multiple devices and probably own a Kindle. Flipkart recently hit a milestone of 1 Lakh books sold maybe Amazon will hit that milestone early on ebooks. Let’s not forget that the Founders of Flipkart are a product of Amazon’s employees. Amazon will surely spear it’s way in India what would be interesting to see is how all these other e-commerce companies would adapt vis-a-vis Amazon India and it’s massive parent from US.
Regards,
Ankit Sawant
Project Bazinga!
Ankit Sawant
Hey Sanchita,
I am trying to set up an eBay store and was wondering whether you can give me any pointers and advice for the same? I am a noob in this part and surely your advice would help alot.
I have sent you a friends request on trh and FB. Kindly accept them so that I will be able to contact you 🙂 Have a great day ahead.
Regards,
Ankit Sawant
Project Bazinga!
Sanchita Dutta
Hi
check this link from my blog. there are a few articles written in great detail on how to set up business on ebay.
https://www.gizmobhai.com/category/business/ebay-2/
u can get in touch over the mail at dtektrading@gmail.com. All business mails are handled from this id. i do have my personal id and FB id which caters to my other avatar, ie of a housewife 🙂
Do let know of any doubts that you may have after you have gone through all the write ups. would be happy to answer
best wishes n regards
Sanchita Dutta, co-runs two ebay powerseller accounts gizmobhai & indiacod and an e-com website http://www.indiacod.com
Ankit Sawant
Hi,
Thanks a lot for those awesome links 🙂 Will go through everything and mail you in case I need further clearance on any particular issue.
Regards,
Ankit Sawant
Sanchita Dutta
Happy to share with all that we have finally taken the plunge to sell on the other two most popular marketplace platforms, ie snapdeal and flipkart since 29 Aug and have already made the first sales on both. the seller ID remains the same ie INDIACOD, thereby now selling on all the prominent platforms ie ebay, amazon, snapdeal and flipkart and of course on our own site http://www.indiacod.com. Fingers crossed!
Over flipkart, you could find as one of the sellers for certain products lines that include ES18, plantronics and rainbow screen protector to start with. more being added everyday..