Amazon invasion of India brings the mother of all business battles

Amazon invasion of India brings the mother of all business battles

Amazon‘s dynamic entry into the world’s second-most populous country sets the stage for a tough battle with Mukesh Ambani, who controls the huge market in India

The Amazon.com has begun to invade every sector in India by delivering groceries to insurance to drug supply, creating a monumental backdrop conflict with the platform Jio.

The American giant is spreading at an unprecedented rate that is not seen anywhere else in the world. Jeff Bezos‘s company now offers prescription and over-the-counter medications as well as herbal remedies in Bangalore.

It began selling car and motorcycle insurance last month – something the Seattle-based Internet giant is trying for the first time – promising a process so simple and paperless that it takes just two minutes to complete. In addition, it began distributing food from restaurants to Prime Amazon subscribers last year. This year it is going to launch a financial advisor and wealth management services.

These ambitious moves by Amazon coincide with the equally rapid expansion of the parent company of the domestic platform Jio, Reliance Industries Ltd., the giant that has everything from energy production to the retail market and is owned by Mukesh Ambani, one of the richest people on the planet.

In just a few months, Reliance managed to raise $ 20 billion in funding from sources such as Facebook and Google to create India a supergiant on the internet.

On Wednesday, Reliance’s retail unit announced that it had acquired a majority stake in leading online pharmacy company Netmeds. In addition, it is preparing to add a number of financial products and services, such as insurance, brokerage and mutual fund participation.

Wild battle

“This is going to be one fierce battle,” said Satish Meena, a senior forecasting analyst at Forrester Research. “It’s a fight for the household’s spending.”

Jeff Bezos sees India as a crucial battle for Amazon, especially after its failure to penetrate China. He now faces a champion at his own home backed by some of his toughest opponents in the US.

The toughest fight will be at the grocery store, accounting for 55% of all Indian retail sales, according to Forrester. Although it is only the beginning, Amazon is steadily promoting grocery delivery services through the Amazon Pantry service and products through Amazon Fresh.

Reliance responded by recently launching JioMart as a competitor in 200 cities and managed to collect an average of 250,000 orders per day in a matter of weeks.

The two are also in talks with one of India’s largest grocery chains, Future Retail, which controls Big Bazaar stores. Reliance is negotiating the acquisition, but Amazon, which already owns a minority stake, is doing what it can to prevent its main competitor from gaining control.

Amazon is now testing door-to-door fruit and vegetable deliveries in the western city of Pune – another global innovation for the company. This is a direct attack on Jio: Ambani recently said that four-fifths of the fruits and vegetables sold at JioMart or through retail stores come directly from farmers.

“The most difficult battle between the two is going to be in retail stores,” Meena said. “The grocery store is the power of Reliance and they will use their pricing power by combining it with their non-online infrastructure.”