American based e-commerce giant is entering in already crowed business. Amazon is trying to beat Alibaba, but Jack Ma is once again well ahead
Actually 40% of the Indian population is digitized and in just a few years has become the second digital market in the world, second only to China. This country on the rise is embarking on a digital race with unprecedented speed and has thus become the most attractive market for international digital giants, starting from e-commerce companies. The cake looks tasty. In fact, India has 1.3 billion inhabitants, half under 25 years of age, a GDP increasing at rates of 6-7% per year, a growing middle class, tax reforms and investments in infrastructure for a quick modernization of the country.
©Ishant Mishra, indian rupee. According to data, the number of active buyers on e-commerce portals in India, is rising year by year.
Amazon and Alibaba, after winning in many international markets, they now elbow their way into positions of India. But Alibaba is once again well ahead and now Amazon is trying to enter in already crowed business: food delivery. As reborted by local media, Amazon will launch its own food delivery service in October during Diwali festival, one of the most popular in the country.
Its food delivery operation will be launched first in Bangalore before expanding into the country’s other top metros. Amazon will launch its restaurant order delivery service through Prime Now, its very own grocery delivery platform, sources say, while in the interim, is also in preliminary talks with Ola’s Foodpanda and UberEats separately to explore a partnership which could be developed into an acquisition, according to sources with knowledge of the matter as quoted by multiple local media.
Amazon is following Alibaba steps. The move comes at a time when the US e-tailer keeps on entrenching its Indian business by diversifying its offerings in one of the world’s largest retail markets.
However, the first big Amazon’s competitor in the country is certainly Alibaba. Hangzhou-based company is already winning the Indian market with Lazada, but the two international e-commerce giants have launched different strategies in India. In fact, it was the diversified approach and the capillary investments that brought Alibaba ahead of its American counterpart. Jack Ma’s company aims to replicate the success achieved at home by entering the Indian startup Paytm in 2015, the most used digital payment platform. And Paytm already launched Paytm Mall.
©Entrackr. Amazon’s grocery services haven’t really taken off amidst cut-throat battle with local competitors like Bigbasket and Grofers.
Alibaba, which with its affiliate Ant Financial now owns 40% of Paytm Mall, does not stop there. Faithful to its investment strategy to fund high-frequency use and high-level of user engagement sectors, it is also supporting the online grocery app BigBasket and the food delivery service Zomato. Basically two main indian food delivery services. The past few years have seen the Indian food-tech industry growing rapidly.
Amazon’s grocery services, including Prime Now and Amazon Pantry, haven’t really taken off amidst cut-throat battle with local competitors like Bigbasket and Grofers.
The sector, according to a report by local market researcher RedSeer, has seen an overall grand merchandise volume (GMV) growth of around 140% and an order volumes growth of more than 176%. Market size of the sector is estimated to reach USD 5.7 billion by 2022, according to Statista.
Thus, is quite difficult to understand why Amazon decided to enter in such crowed market such as food delivery, where companies like Swiggy, BigBasket or Zomato are top players. Moreover Amazon’s grocery services, including Prime Now and Amazon Pantry, haven’t really taken off amidst cut-throat battle with local competitors.
©Annie Spratt, New Dheli. 40% of the Indian population is digitized and the country has become the second digital market in the world, after China.
Despite challenges, Amazon believes that the food delivery addition to its Prime program will help it build up an ecosystem with various offerings that would not only grow its premium customer base but also increase transactions through high-frequency services such as food delivery which drives repetitive orders. By the way, Amazon is always ahead. China and India share a fast digital and technological growth, albeit with different times and own individual ways.
With this background, Alibaba has a great advantage over the US competitor and a little extra kick compared to other international players.In this context, in fact, experts believe that it will not be Amazon and Alibaba to fight over the Indian market. China will thus become the sole interlocutor of the digital conversation in India.