Amazon India, and Flipkart Beat a New Path to Customers’ Doors

New rules for e-commerce in India framed by the Department of Industrial Policy and Promotion  bar any one merchant on sites such as Amazon, Flipkart or Snapdeal from accounting for 25 percent or more of total sales.

The rules also stipulate that “e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.” Perhaps, the  “big sale day” strategies are over.

Yet, even before these rules were announced, both Amazon and Flipkart had begun reaching out to customers in small towns, and Tier II and III cities with a new message : trust, convenience and easy returns, which is replacing the discount offerings that these companies have always relied on. With the e-commerce industry set to cross the Rs 3,800 crore mark by the end of this year per the Associated Chambers of Commerce and Industry of India estimates, the online marketplaces are vying for more attention from these towns.

Both companies claim that in trying to widen their base of customers they are focused on converting the older generation into online shoppers. Their ad campaigns – Amazon’s ‘apni dukan‘ (your own shop) and ‘Flipkart matlab bilkul pakka‘ (Flipkart means quality assured) – are geared to capture customers’ trust and loyalty.

The convenience of shopping at home with the option of accepting cash on delivery appeals to consumers in the 18-25 years old category. However, the generation, which is slightly older, is where the opportunity lies. And they need a different story, if they are to be brought online, says Business Standard.

“The Indian e-commerce space is still at a very nascent stage with significant potential for innovation and growth,” said an Amazon India spokesperson. As the new campaigns indicate, nothing will be left to chance when it comes to converting this potential into reality.

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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