Amazon, America's largest etailer , began as an online bookstore in 1994. Two years before Jeff Bezos pored through the dictionary and picked out the world's biggest river as his brand name, lesser known (at least as of today) Charles M Stack founded books.com. Today, Stack's online stores (also known as Book Stacks Unlimited) will be difficult to locate — they were gobbled up by Barnes & Noble over 15 years ago.
Contrary to popular perception, Amazon wasn't the first mover (by some accounts it was second, by others even fourth). Also contrary to popular perception, the first mover doesn't always emerge the winner.
Marketing gurus will tell you about the first-mover advantage, which is typically the head start the first entrant gains by capitalising on a monopoly-like situation to rake in fat profit margins.
Lesser-talked-about is the second-mover advantage, the competitive advantage an entrant gets by learning from the pioneer's mistakes, copying his successful strategies and stealing his share (instead of wasting time creating a market).
The $12-billion ecommerce battlefield in India is littered with first movers; and second (and third, and even last) movers. Fascinatingly, many of the leaders are ventures founded India by Indians (albeit fuelled largely by foreign venture capital and private equity). For instance, etailer Flipkart and online travel firm MakeMyTrip are both ahead of their global peers Amazon and Expedia.
So can the order of the first mover being first ranker change? For sure, an aggressive Amazon India will insist as it goes about the task of closing the gap with Flipkart (and Bezos may gleefully remind you of the Book Stacks example). Beyond Amazon, too, in the classified marketplace for used goods, the global giant (OLX) moved into India two years before today's leader (Quikr) got going. Today, the Indian second mover claims to be in first place — although OLX too maintains it is the market leader.
But then these are early days of ecommerce in India, with businesses growing on the back of ready and willing investors, and profitability a mere gleam in the eye of the Indian founders. "Wellfunded global players can easily absorb millions of dollars in annual losses and this can put Indian ecommerce players in trouble," says Sanchit Vir Gogia, chief analyst and group CEO of Greyhound Research.
So will the local leaders be able to keep the global giants at bay? Can some of the second movers take first place? ET Magazine takes a look at six cut-throat skirmishes underway between global giants and Indian top dogs on different parts of the ecommerce battlefield. In many of these encounters the winner may have already been decided — and it's not necessarily the two brands slugging it out but the Indian consumer.
When Groupon entered India in 2011, the Chicago-based daily deals giant had numbers on its side — 120 million subscribers globally. After four years, that number has got more formidable, climbing to 260 million. For good measure, monthly unique visitors stand at 160 million, it has sold 900 million units so far and the per customer annual spend on the site works out to $155.
The picture in India, though, doesn't look that impressive — not at least when stacked up against the local leader in the country. While Groupon India has just 5 million unique users and 25,000 merchants, its nearest rival and largest player in the segment Mydala has 10 times as many unique users and eight times as many merchants. If that wasn't enough, the Indian No. 1 has 4 million transacting customers every month, and mobile users download roughly 150,000 vouchers from Mydala every day.
If such numbers aren't fazing Groupon, perhaps it's because they're looking at a bigger picture. "India is the fastest growing amongst 48 countries where Groupon is present," says Ankur Warikoo, regional head, APAC emerging countries (India, Indonesia, Thailand, Philippines).
Groupon has had its share of learnings from the India market and has been using to finetune its strategy. For instance, India is the only country where Groupon has the cash on delivery mode of payment. While globally wellness is the biggest category for Groupon, in India it's food and beverages. And almost 90% of the deals closed are face-to-face, says Warikoo, who managed to get Sequoia Capital to invest $20 million in the Indian unit in March this year. The investment, though nothing compared ..
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