The Indian Economic Times (Radhika Nair, 18/2/14) reports that in the next two years, Amazon will use its own logistics network to deliver nearly every product sold on its Indian portal. This is just one strand of an aggressive strategy of differentiation, offering an intriguing case study for both internationalisation strategy, and competitive strategy in an oligopoly market.
The Indian online retail market has three main players: Flipkart, Snapdeal and Amazon. In the months since Amazon launched its portal, prices have been slashed across most categories, and same-day or next-day delivery launched. ‘The need to differentiate has become all the more critical…. In the horizontal space when even price becomes similar, it remains to be seen how differentiation will happen.’
Competitors have responded by securing exclusive distribution of prime brands, made possible by ‘building strengths in technology, supply chain and branding… Technology innovation is also set to increase as companies begin to use data to build new personalised offerings.’