Amazon v/s [Flipkart + Myntra + Big Basket/ Grofers] – Re:imagine
The brand building exercise of Amazon in the last 18 months has been quite interesting as a big giant competing with the Indian e-commerce brands. Amazon has launched “Kirana stores, going to launch its own private labels in fashion, apart from the usual books, electronics and daily goods. India has its own “blue-eyed” brands, each capturing a sector or more, Flipkart for all daily goods, books, electronics etc.; Myntra for fashion, Big basket/ Grofers for grocery market.
There are several areas in customer service, back-end infrastructure, logistics, business strategy where Amazon and Indian e-commerce companies can be compared and it may seem the favour might tilt towards Indian companies. Although it will be a big mistake to assume that Amazon India cannot race well beyond Indian companies if they solve local challenges and execute ideas/ strategy strongly to capture the market. So I will stick to the brand experience aspect of these companies which includes brand management, product, marketing & customer experience.
Indian e-commerce brands
– Built a national brand, strong marketing and brand presence across cities. Customers are actively engaged with the brand experience.
– Each brand (Flipkart, Myntra, Big Basket) have captured a particular market, brings customer & product focus. Allows the brand to engage its customer more closely as compared to Amazon or a single large brand (Tesco, Walmart).
– As “Indian” brand, a home-grown advantage to be more relatable & affable brand for Indian consumers (although this has its expiry period if not able to deliver quality service & product consistently).
– Competitors like Amazon are inching closer to providing quality service with value for money. Competitors catering to niche product categories or common market are also competing with the Indian giants and they are moving fast to capture a lion share.
– Flipkart and Myntra have burnt capital for resources and marketing. They could be more efficient? The company has grown big beyond the founding team’s control to influence the market. The lack of presence in offline retail, the online brands are forced to reiterate its brand presence for target customers by innovating new ideas of engagement and spend more on marketing and advertising. That is challenging and puts pressure towards getting more revenue and be sustainable (if not profitable).
– An established company and brand culture replicated in India, focusing on execution, customer experience and aggressive goals. The sharp focus on growth allows the team to align with the brand culture that has been consistent.
– Amazon and its founder’s strength have been the experience of constantly innovating with business models, strong ecosystem for execution and managing tough periods for business. The “survival” extinct of the business helps the brand to consistently engage and service its Indian customers.
– Amazon wants to be omnipresent amongst all product categories to become the single largest “online destination” in India. However, Indian consumers and Indian market are unpredictable, inconsistent shopping patterns, brand loyalty is product specific and value specific. This puts high pressure on amazon to constantly innovate as a brand.
– Amazon has taken Indian specific themes for marketing and advertising but it is not yet “distinct” to differentiate the Amazon brand for its Indian customers and from competitors. From the great Indian sale marketing with Indian elephants, kitsch graphics, Indian family theme advertising, family happiness and celebration, have we not seen this with other brands too? Here Indian brands such as Flipkart started with a distinct and funny campaign about children acting like adults exploring online shopping (it was indeed creative & brilliant with its series) to now creating advertisements around small business owners benefiting by joining Flipkart vendor ecosystem and how customers from tier 2 cities or smaller towns feel about online shopping and how it has made them more aspirational. Amazon did try a viral video for husband and wives style of shopping (#when a woman shops) where it was an “experiment” for men to predict what their wives would shop. The concept was well intended but in execution and overall connect, it felt a bit forced or predictable that wives will shop differently. They will need to build a body of viral videos that need to be subtly connected to the main brand message (this is applicable to all brands) which is not clear. You can still replace the brand name in the video and the message will be same ?
The overall language of brand advertisements or marketing in Amazon doesn’t have a “distinct” Amazon India feel, it is generic, where you could also possibly replace the ads with any other brand/ company logo and it would be okay.
This is something Amazon India can seriously work on – A brand distinction.
Opportunities in the Indian Market
– Each Indian brand: Flipkart, Myntra, Bigbasket can really focus on it product/ market and makes it marketing/ brand message more sharp and creative. I personally think that big basket is weak in terms of branding, design and creative marketing of its brand as an experience (although I found their service and feedback loop good) where brands like Grofers has a clean branding, better design, and minimalistic UX design of mobile app (although they don’t do much of advertising/ marketing). But Big Basket & Grofers have a first mover advantage and driving aggressive business presence and they can use this to build a stronger brand presence than Amazon’s “Kirana” stores.
Myntra will have to play out their product and marketing approach more strategically as Amazon rolls out its private fashion brands. Myntra will be focused (product design, pricing, marketing, experience) about each private label with other competitors. Big e-commerce brands (Myntra private brands, Abof, Koovs) will have similar product categories, maybe similar trends and product styles like Amazon private brands and the customer will be left with no choice but pick a more relatable brand, ease of shopping that offers niche brand experiences (as compared to product discounts, offers, advertisements/ marketing).
Flipkart has a tougher task to cut out against Amazon as a brand. Amazon still offers better prices of same/ similar products on Flipkart and as these standardized product categories (books, electronics, home, etc) can be easily comparable, a customer will be inclined to buy on Amazon. Flipkart can try 2 things: 1. Reimagine and create interesting marketing campaigns that put Flipkart on a different pedestal of pushing boundaries (now that the brand is well established) but need to have a distinct brand message “consistently”. 2. Innovation – introducing new products, niche products, exclusive deals and wide merchandise offering that is “lifestyle” oriented, innovative positioning and marketing to get the customer’s interest.
Amazon can consider two approaches:
- Sub-branding: As Amazon caters to a wide spectrum of product categories and market, sub-branding would help each vertical to pursue its own brand management and marketing cycle to create the distinction from its competitors yet hosting the product on a single platform. In offline retail, players such as Future Group, Aditya Birla Nuvo (Madura Garments), Arvind brands have different brands with independent brand experience, retail and product strategy. It has helped them to retain multiple brand properties, capture market share and engage its customers under one umbrella company. Example – Under Future Group, you have Big Bazaar (Grocery market), Ezone (electronics), Central Mall (shop in shop for brands), Brand Factory (discounted / factory price apparel) each catering to a market and building its own brand experience. However, these are strategic decisions and need to be coherent with overall Amazon global and Amazon India business strategy in order to create separate brand properties within Amazon to pursue this model but it is worth a consideration with the changing Indian market.
2. Differentiate by niche marketing: A more diluted version of sub-branding Amazon would be to create subtle sub-branding of Amazon by bringing differentiated design and marketing experience for Amazon Kirana as compared to Amazon Fashion to Amazon Home to amazon Electronics. The advertising and marketing campaigns can be clearly differentiated; each sub-brand has a distinct positioning for the customers to relate towards. The product merchandising, styling and marketing in each sub-brand can be distinct yet retaining the overall Amazon brand consistent. This sub-branding is primarily meant to differentiate and stand out against its competitors more than customer’s trying to differentiate the sub-brands while browsing Amazon India portal. Creating a distinct “brand flavour” to Amazon India while retaining the brand personality of the parent company will be a key component to differentiate itself from a hypermarket flooded with new and old brands.
The coming years will witness more brands and business models that will cater and capture niche market as well as mass market, offering well designed/ innovative product or service where margins will be better, customer engagement is deeper and brand experience can be stronger. The recent article in Economic Times has reiterated a few of my observation and I also have interesting insights on the apparel industry in particular.
Amazon will have to manage these online and offline retail competitors to sustain that competitive edge. The competitive edge in coming years will not be value for money/ discounts/ offers, as the customers will be bombarded with too many brands and offers. The edge will be which company can capture the market, engage the customer uniquely, stand out from the cluttered market of brands and offer trendy products, quality service. It is going to be hyper and the scale will be diverse.
“In a highly competitive market like India, the need for brands is not just differentiation but also being DISTINCT, which requires a combination of consistency and creativity over a period of time.”
As I will continue to reiterate, creating innovative brand experiences (apart from innovative, quality product/ service) will differentiate businesses in future, in India and globally.