Success mantra in India
India (INDA) is Amazon’s (AMZN) most important international market. Since its entry into India in 2013, Amazon has poured in billions of dollars in investments to mark its presence in the country. The company has swiftly marked its presence as a leading e-commerce player in the country alongside established domestic players like Flipkart and Snapdeal. Amazon’s success in a difficult market like India is a perfect example of what it takes to succeed in emerging markets.
- Adapt and localize
Amazon understands that to succeed in emerging markets it needs to adapt their business model rather than implement their standard operating model. As an example, currently, Indian regulations do not permit foreign ownership in the retail sector. To counter this problem, Amazon operates as a marketplace in the country than a retailer.
- Understand the consumer
Payment mechanisms in India are still to mature and credit card users are still relatively low. E-commerce companies in India offer customers cash on delivery to overcome this problem and win their trust. Additionally, Amazon offered a price comparison website called Junglee for price sensitive customers in India.
- Backward integration and local partnerships
Logistics and delivery have been a major problem in a largely underdeveloped country like India. To counter this, Amazon has built warehouses and invested in logistics. Further, it has also partnered with Indian Postal Services to enable delivery and reach. Amazon has also tied up with local grocery stores to overcome failure in deliveries.