India is a great nation and its advantages are even more visible if you are an e-commerce behemoth looking to expand your presence. And that is why the nation is host to an entire lot of e-commerce companies fighting with each other for the reign. The battle is going on for quite some time and now, it seems like the final battle is to be fought between Alibaba and Amazon.
The country has a huge online population. The complementary fact is this population is only expected to increase in the upcoming time as the Internet penetration grows. This online population is expected to reach somewhere around 450 million by June this year, according to the Internet and Mobile Association of India. Putting things in a better perspective; the United States of America had a total online population under 350 million at the most recent count.
Currently, the US and China are the top players when it comes to online shopping. But, India is expected to make a status for itself as the value of online sales in the country will be USD 48 billion by 2020, according to analyst firm Forrester.
Meanwhile, the Alibaba-Amazon conflict has been growing tremendously and it seems like these two rivals may lead the conflicting factions in the final battle for the supremacy in the e-commerce space in the country. Sure, there are other players in the race, but it appears that their race has already gotten slow and by the time the battle is over, the winner will be amongst these two only.
E-commerce is a unique battlefield, and to win the customers you should focus on offering discounts at a great price. But, giving discounts is not really in the best interests of a company and more so, when the firm in the discussion is still a startup and is yet to show the signs of profit. Something similar happened with homegrown Flipkart and Snapdeal who got caught up in offering discounts in an attempt to lure more customers. And of course the money came from the investors.
Pointless to say, such strategy can not be maintained for a long time. Both Flipkart and Snapdeal are trying to maintain their foothold, but they are losing it every passing day. On one hand, Flipkart is suffering from price cutting after price cutting, while on the other hand Snapdeal is attempting to balance things by cutting off employees. And this is where both foreign companies, Amazon and Alibaba come in with vast offers.
Let’s take Alibaba for example. The Chinese e-commerce giant had invested in Snapdeal, but now has been focusing its whole attention upon Paytm. A few days back, it had purchased a 36.31 percent stake of the Paytm’s e-commerce subsidiary for a USD 177 million sum. This has come in addition to the majority stakes Alibaba already has in Paytm’s parent firm, One 97 Communications. So, it is probably fair to assume that Alibaba is calling a lot of shots for Paytm to win the battle.
When Alibaba decided to move to India with its own brand, Paytm was a fair and obvious choice. Before moving in with e-commerce, the firm has always believed in laying down the roads in the form of payments. In China, for instance, Alibaba’s Alipay platform is wildly famous. With all the means at its disposal, Paytm is moving ahead with freedom. Considering all the struggle most major domestic players have been going through of late, they will be focusing most of their attention on setting things right.
That leaves Amazon, one of the few foreign e-tailers, that has a significant brand following and also has significant funds at its disposal. Thanks to all the resources it has, Amazon could back another company or it could be doubling down its growth with new advertising campaigns. In light of all these facts, it is only a matter of time when Alibaba and Amazon start fighting intensely with each other. One way or the other, the e-commerce scenario in India is likely to experience some interesting movements in the near future with the emergence of a champion from these two.