What Advantage Does Global E-Commerce have Over Indian Brands?

Elephant in the Room
Strong global leaders in the e-commerce domain are undoubtedly Alibaba, Lazada, Amazon, E-bay etc. They are into deep into the minds and pockets of the universal population and have great logistics network, so to speak. If one is China’s greatest corporate power, the other is a bigwig in South-east Asia.

While each one believes in digging and deepening moats, these global super brands have grown due to the unseen backbone called ‘logistics’. According to recent media reports, Alibaba might marry Lazada, increasing the benefits for the consumers and giving merchants more reasons to sell on these marketplaces.

There are various plot surveys happening to experiment but the caveat is not that, this partnership is still nascent; it’s about the uncertainty, of how big it’ll become?

If at all there comes a new elephant at all in the room, it will be Lazada which has almost got a latest funding of about US$1B; founded at Singapore. Lazada is integrating its payments system Hellopay with Alipay, but the details are not available as of now. While it is unclear how Lazada would be expanding in Southeast Asia, the target is to fulfill almost 2.5 times in 2017 compared to the previous year.

Companies like Amazon have a long-term goal to export products to India and its neighboring countries, but more significantly for Indian homegrown brands like Flipkart, Snapdeal lag a lot behind. Shockingly, we are still struggling to get margins. While Amazon is said to bring in a Prime Now model which allows aperson to book subscription same-day including delivery of meals, groceries, and essentials within one to two hours.

Small Fish in the Sea
Not only the Indian e-commerce players are lagging behind, on the logistics side, we are more focused on being an enabler, and we also focus on the last mile. However, it will take us a while to reach Amazon’s customer satisfaction level. Foreign companies especially theses American ones also have a strong technical-support. Not just this, they enhance their have tie-ups with international logistics partner such as Blue Dart (through DHL), DTDC, FedEx and Aramex.

Amidst the Indian e-commerce Flipkart, Snapdeal etc have shown key interest in tying up with the center and promoting the sale of domestically made products. Through the Textile Ministry through which they have connected with the artisans, weavers, handicraft makers and painters from Varanasi, Kota, Salem, Paithani, Jaipur, and Himroo to sell their products but by and large their customer base is restricted to India. However, analysts say India in itself is a huge market, especially the Tier-2 and 3 cities.

Game-Changers in E-commerce
Amazon can be one of the key game-changers which alters the total outlook of other players too, such as it has plans of investing in airplanes and trucks in the US. While it positioning itself in a different way to capture the Indian market, it is a cue for Lazada to headstart it’s wave of change. It can be the next Alibaba, or the next Snapdeal, depends on what is chooses to be.

Shipping is one thing, home-brands should actually work on more seriously, since companies such as Flipkart and Snapdeal, have reached a certain level after which the Indian players require logistical strength to ship products to global customers, which the global players like Amazon & e-bay do with ease. On the other hand, eBay and Amazon are leveraging their strength selling products such as handlooms, handicrafts, artificial jewellery and electronics to global consumers.

If at all the Indian brands can control some of the elements of the logistics cost in India such as Warehousing, Transportaion, Packaging Losses, Inventory, Order Processing & Administrative; there can be some hope for these Indian startups too.