Ecommerce Competition Continues to Grow as Amazon Enters India

By Carlos Howell

June 15, 2013 News No comments

In today’s techno-centric atmosphere, it’s no wonder ecommerce is taking off. This modern convenience is not only accessible on a global scale, but it is also changing the entire sales industry. Amazon.com recently made headlines by announcing its ecommerce expansion into the Indian market, and it has many people wondering (or possibly even fantasizing over) what’s next in the world of ecommerce.

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E-commerce Expansion.

A recent study by a digital marketing research agency called eMarketer revealed that ecommerce is expanding rapidly, and on a global scale. Just how massive is this expansion? Over 21 percent in just one year, and with estimates of another 19 to 20 percent expansion over the course of 2013. Currently, Asia, North America, and Western Europe hold the top three notches in overall sales, but every single area of the globe is showing an increase, and that includes India.

Why India?

If all of the world is expanding, why would Amazon choose India, specifically? To understand how much this business move makes sense, you must first consider that Amazon originated as a bookstore. Then take into account the fact that India’s publishing industry is one of the fastest growing of its type in the world. By paying tribute to its first incarnation and catering to India’s strong points, Amazon is actually making a very savvy decision by establishing its niche in the Indian market.

What the Amazon India site looks like.

Amazon’s India site is modeled as a marketplace, where visitors can browse vendors and sales items and make purchases through a third party provider. Amazon is starting small in India, with initial offerings of books, television shows, and movies, but the multifaceted corporate giant reports that it has plans to expand the site category list to include sure-sellers like mobile phones and digital cameras. The Amazon India website will offer customers many of the great features that American patrons are used to, including secure ordering, online payment processing, and Amazon’s world-class, 24/7 customer service provision.

The trouble with the move to India.

Up until now, Amazon and other retailers have been prevented from entering the Indian market by way of foreign direct investment (FDI) restrictions. While these restrictions are still in place and very limiting, Amazon has found a way to get around them. Amazon will not be accepting payments and processing sales transactions directly through the Amazon India website. Instead, Amazon India’s marketplace setup will enable local, third-party vendors to do the selling through the Amazon-hosted website. This business model will likely serve to pave the way for other retailers looking to ride the wave of global ecommerce expansion.

Amazon’s move into India is no-doubt a wise one  – but that’s no guarantee of success. Only time will tell if Amazon’s India site will soar into greatness and change the landscape of ecommerce altogether, or if it will fade into the background amidst India’s already well-established publication industry.

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