Tuesday 5 April 2016

The Battle Turns Fierce Among E Commerce Players

The battle among the eCommerce players in India is going to intensify in the smartphone segment in 2016. The phenomenal growth of the smartphone business has made the competition stiff for all the eCommerce players. Adding to that the proposed entry of global giants like Alibaba is expected to make the path tough for all the online players. Smartphones is the most popular category among the online shoppers and the battle for the leading position in this segment is going to determine the success of eCommerce players.   
India is the second largest smartphone market in the world in terms of number of users. IDC predicts that by 2017, India is expected to overtake the US and become the second largest smartphone market globally. According to Gartner, sales of smartphones in India are on pace and will reach 29 per cent in 2016 and continue to exhibit double-digit growth in the next two years. Thus, there is an enormous opportunity for both domestic and global smartphone makers to leverage on the market potential. 
According to the Counterpoint Research, Flipkart tops the list, followed by Amazon and Snapdeal. The trio accounts for almost 90 per cent of the online smartphone sales volume. The biggest reason for Flipkart’s success in 2015 was its inventory led model and intensive advertising campaign. Snapdeal and Amazon also benefited from the inventory-led model. Eyeing on the youth, who are the major online shoppers for smartphone, smartphone makers and eCommerce marketplaces are introducing innovative strategies like “direct-to-consumer” model, to attract more consumers. Along with discounts, online quiz, cash on delivery, cash backs, marketing support, eCommerce players are trying to connect with the masses through digital platform and celebrity endorsements. 
The competition is expected to further intensify with players such as PayTM, Shopclues and others are aggressively promoting their platforms. Also players such as Snapdeal, Shopclues and PayTM are well positioned against Flipkart, Amazon from in terms of brand recall. The recent announcement from the Indian government on a new policy that allows 100 per cent FDI in eCommerce marketplaces will boost the competition between online marketplaces.
Considering the changing buying pattern among Indian consumers, smartphone makers are also becoming smarter and selective in choosing the marketplace. Certain vendors like Lenovo have introduced its Motorola range of smartphones exclusively on online marketplaces. According to the Counterpoint Research, Lenovo (including Motorola) was the biggest beneficiary of this trend, capturing 25 per cent share of smartphone sales through the e-commerce channels. This has helped Lenovo to jump to the number three spot in India’s smartphone segment. The new entrants, mostly Chinese brands, together captured almost half of the online sales segment. Though Indian brands overall were slow to get on the bandwagon as they heavily invested in offline sales channels, but Micromax, with its Yu brand, became the number one domestic brand across online channels. 
Industry experts says, with the entry of new players in the online marketplace, the vendors as well as the eCommerce giants will need to look beyond heavy discounting and try to focus more on value addition to retain their market share. 
Trends such as, mobile wallets and social commerce are going to be hot this year to create stickiness among the online shoppers. Also, it would be interesting to see that how the competition among the eCommerce players will benefit the end users in terms of better consumer experience.

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