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 …