MON 21 Jun, 2021
Economy

Fight between Amazon and Reliance intensifies

In the fight between Amazon and Reliance Industries Ltd (RIL) for dominance over India’s burgeoning online retail market the two companies continue to almost mirror each other in ground- up strategies to create the most preferred retail ecosystem for consumers, matching each other step by step
In the fight between Amazon and Reliance Industries Ltd (RIL) for dominance over India’s burgeoning online retail market the two companies continue to almost mirror each other in ground- up strategies to create the most preferred retail ecosystem for consumers, matching each other step by step. This can only intensify in the foreseeable future, given the high stakes, experts said.

Over the last few years, Amazon like RIL, has been investing in several companies. It has targeted segments such as fintech (Acko, Capital Float, Emvantage, and ToneTag), sellers on platform (Cloudtail and Appario), the financial services marketplace (BankBazaar), book retailers and publishers (Westland), home services (Housejoy) bus aggregators (Shuttl), and all-in-one aggregator app (Tapzo). Over the past year, Amazon has also expanded into ordering online flight tickets, food delivery, e-pharmacy, and education.
RIL has invested in online pharmacy Netmeds to take on Amazon pharmacy. It has bought over logistics startup Grab to battle Amazon Food. RIL has rolled out Jio TV and Cinema and has acquired music streaming app Saavn to take on Amazon in the over-the-top space.
“E-commerce players such as Amazon and Flipkart are working on their offline retail strategies in India. Globally, similar strategies are being followed by Amazon and Alibaba to fine-tune their online-to-offline strategy," said Garima Mishra, an analyst with Kotak Securities.

Amazon also wants to utilize the offline footprint of these stores to push its own private labels. These include AmazonBasics, which has products such as ACs, HDMI cables, batteries and cables, home necessities, and general merchandise and apparel labels, as well as Prowl and Just F. Amazon may use these stores to retail its grocery brands as well.

In India’s $33 billion online market, Amazon and Flipkart are dominant entities, together controlling 81% market share. However, RIL’s nascent online services are estimated at 1% market share in 2020.
Amazon India, which launched its marketplace operations in 2013, has invested in supply chain infrastructure, seller education and onboarding, and customer acquisition. Amazon Prime, launched in July 2016, has ensured customer stickiness in Amazon’s ambition to become a one-stop shop, not only for the retail needs of consumers, but others, too, including video (Prime), payment solutions (Amazon Pay), smart devices (Alexa, Firestick and other proprietary products), and ticketing (by enabling train and air bookings).

To strengthen its offline supply chain, Amazon in July announced a 20% increase in its warehousing capacity in India to 32 million cubic feet and is now operating 60 fulfilment centres (FCs) across 15 states. It recently launched ‘Receive Centres’, which act as product collection points where sellers ship their products for further distribution across the Amazon FC network in India. RIL also aims to invest in logistics and supply chain.

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