Battle lines are set to be drawn in India’s growing e-commerce market with the entry of Amazon.com, the world’s largest online player.

Amazon Seller Services Private Ltd has launched its marketplace in the country, where already players such as eBay, Snapdeal, Indiatimes and Homeshop18 have carved a niche for themselves.

Even as Amazon was quietly planning its entry, eBay, another US-based leading online marketplace, had just announced its partnership in India’s largest online aggregator Snapdeal.com. eBay has invested substantially in Snapdeal to gain access to the latter’s 18 million users.

So now will it be one marketplace player versus another marketplace player (those who facilitate transaction between buyers and sellers) or marketplace players versus direct selling players (e-tailers)?

Ankur Bisen, Associate Vice-President at advisory firm Technopak, said, “We don’t see any dramatic impact in the short-term for e-tailers as Amazon will operate as a marketplace just like eBay or Snapdeal does. However, it will definitely create a buzz among consumers that will drive traffic to their site initially.”

Prices may drop

“It is price and experience that matters. Consumers will go to those who offer better deals. Going ahead we will witness drop in prices by players who are present in the categories Amazon is present,” he added.

Several industry players that Business Line spoke to are of the view that Amazon’s entry might pose threat to many in the long-term once the Government allows FDI in e-commerce. At present, there is a blanket ban on direct investment by foreign players in the domestic firms.

“The e-tailing market is expected to speed up the consolidation trend. Once there is clarity on FDI, we will be able to say what will happen. Till then it is just wait and watch,” said Suminder Pal, GM (sales and sourcing), fashionandyou.com, which is into apparels and accessorize.

Kunal Bahl, founder, Snapdeal.com, said that Amazon’s entry validates the potential of the Indian market and reiterates the importance of the managed marketplace model in India.

 Meanwhile, Sachin Bansal, founder, Flipkart, said, “We are a first generation Indian organisation that has always focused on giving the best value to our customers. We do not strategise or operate vis-a-vis our competitors’ strengths or strategies.  We set our own standards and strive to achieve the same.”

The marketplace players, however, might witness challenges on vendors’ front. Some vendors might switch loyalty to Amazon, given the brand and trust factor the company has gained globally, said Sumider Pal.

“If you look at the recent trends, even basic phones are starting to have Internet capability, something which was not the case two years back,” said Arun Sirdeshmukh, co-founder and CEO, Fashionara.com, whose last stint was with Reliance Trends.

However, questions around efficiency of the supply chain and difficulties pertaining to logistics exist in India. “Right now logistics is a nightmare,” said Kalaivani Sadagopan, Senior Vice-President, CaratLane.com.

Step up tech investments

Companies need to step up technology investments in networked warehousing, especially if they resort to drop-shipping or same day dispatch, according to Suchit Bachalli, Executive Vice-President, Unilog Content Solutions.

Companies in ecommerce business say that for a medium-size retailer, it makes sense to partner with the likes of Amazon. “Medium-size companies and branded retailers like (Croma) can leverage by being with Amazon,” said Sirdeshmukh.

(With inputs from Venkatesh Ganesh in Bangalore)

priyanka.pani@thehindu.co.in

manisha.jha@thehindu.co.in

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