Amazon Chooses Offline to Clear Inventory

India: Amazon India Ltd., a subsidiary of Amazon.com Inc. provides online retail services. The company was founded in 1994 and is based in India. Amazon has requested brick-and-mortar retailers to sell its exclusive online only phones such as “one plus”, in a bid to clear the inventory. If this strategy works out the American ecommerce giant could make offline distribution a part of its India strategy.

The company is exploring options post demonetization as the sales of the smart phone witnessed a huge slump. Since the smart phone market is down by almost 40%, in November as compared to last year, Amazon quickly forayed into offline distribution to clear its inventory and boost sales. 

According to TechSci research, this strategy is adopted to boost the sales of the mobile market which had witnessed a slight dip due to demonetization. The company has pitched popular online brands such as OnePlus and Coolpad and indicated that the offline stores portfolio will be expanded.  India’s e-commerce market is forecast to grow exponentially over the next five years. On account of rising number of e-commerce websites, growing internet penetration, and increasing sophistication and diversification of small businesses.

According to report published by TechSci Research “India E-commerce Market Forecast & Opportunities, 2020”, the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. E-services segment, which comprises online travel, online payments, online classifieds, etc., is expected to continue its domination through 2020. However, the e-tail segment that includes electronics, apparels & accessories, health and personal care, etc., is expected to witness significantly higher market growth compared to e-services segment over the next five years. During 2015-20, the western region is expected to remain the largest e-commerce market in the country. Major players operating in India’s e-tail market include Flipkart, Snapdeal and Amazon.