It doesn’t come as a big surprise that the e-commerce giant, Amazon, would invest in India. Not only does the country offer an excellent market for online shopping, but it also gives Amazon a good chance to test out new services and products. As the company expands its business in India, it will gain a clearer picture of the country’s digital shopping trends and what kinds of products are popular there. Below we’ll discuss six things you should know about Amazon’s recent India purchase.
1. Relatively New To The Country.
Forbes contributor Sara Morrison wrote that Amazon’s India purchase is ‘a significant bet for the company, one that could pay off handsomely.’ This bet would be on India because the retail market there is still in its infancy. According to Statista, only 4% of Indian consumers shop online (compared to 12% in the United States). So, while the industry is growing at an incredible rate across the globe, in India it is still in its early stages of development.
This lack of online shopping penetration in India makes it an extremely valuable market for Amazon. Not only will the company be able to sell a large number of its products, but it will also be able to offer its customers a unique experience, one that many large retailers cannot match. In addition to this, by gaining an insight into the country’s shopping habits, Amazon can refine its strategies and offerings, improving its bottom line and that of its customers.
2. Huge Opportunity To Increase Sales.
Many businesses, including large ones, have shied away from entering the Indian market, due to the country’s strict import regulations and high prices. However, with these barriers in mind, Amazon is looking to make the most of the situation and grow its business exponentially in India. It will be entering a market that is not only huge in size but also has a great deal of potential.
The Importance Of Data In E-commerce
One of the reasons why retail sales in India are still relatively low is because most companies don’t have the data to back up their assumptions. According to Statista, only 3% of companies in India have access to reliable customer data, while 88% rely on theoretical estimates and assumptions. This is why businesses there must put in a lot of effort into understanding the customers’ needs and wants, factors such as demographics, psychographics, and digital behaviour, in order to tailor their products and services to suit the country’s consumers.
3. Huge Opportunity For Growth.
Not only will Amazon be able to take advantage of the Indian market’s low internet penetration in order to boost its own sales, but it will also have the opportunity to work with an extremely talented team. Noted marketing and sales expert, Jay Baer, noted that Amazon’s existing management team, alongside the expertise it will gain from its new India team, represent the perfect combination for swift business growth.
According to Baer, this growth can be attributed to three factors: (i) e-commerce as a whole in India; (ii) Amazon’s existing strengths, which allow it to work with lower costs than other retailers; and (iii) the fact that it already has a sizeable customer base in India due to its global operations. With these three points combined, Baer estimates that Amazon could see a 300% increase in sales, in just the next 12 months.
4. High Brand Awareness.
Last but not least, let’s discuss the high brand awareness that already exists in the Indian market. As we’ve established, only 4% of Indian consumers shop online, compared to 12% in the United States. So, if you’re selling a product that is already well known and established in the country, you can be sure that your product will not go unsold.
This high brand awareness in India makes it a lucrative market for product placement, in which a brand or product is deliberately integrated into an activity or show, for commercial gain. If you’re looking to enter the Indian market or are a brand looking to expand your reach there, product placement is the perfect way to do so. Not only will customers be more engaged with the brand or product you’re integrating, but it will also help establish your credibility in the market.
To give you an idea of the brand awareness that already exists in the Indian market, let’s take a look at some of the most popular female apparel brands:
- JOVANI – 14 million followers
- DUOQI – 7.5 million followers
- KARINA — 6.5 million followers
- MANGOVERNMENT — 4.8 million followers
- JUSTIN BIEBER’S OLD COLLEGE ALUMNI ASSOCIATION — 4.2 million followers
As you can see above, these brands have all purchased product placement within the last year, helping them to establish their presence in one of the most populated countries in the world. With over a billion consumers and growing, it’s a market that’s going to be lucrative for the right brands.
As you can see, there’s a lot to be said for India as a market. Not only does it have a huge buying audience, but it also provides a valuable learning experience for Amazon and a brand looking to expand its reach into the country. Even if you’re not looking to expand your reach, but instead want to establish yourself as a credible business in the market, you can do so with product placement, which will be very beneficial for your bottom line. Thanks to these six points, we now know why Amazon chose to enter India and what types of products and services it will offer its customers there.