The big consumer internet players have refueled with funds raised in 2018 and are expected to outspend each other in increasing market share by targeting existing customers and spending more on acquiring new customers. Entering new product categories and geographies is also going to be a key theme for 2019. Forrester sees the following trends in Indian e-commerce in 2019:
Flipkart will move out of the comfort zone
This is the year for Flipkart where more than the competition with Amazon the company will face internal challenges to align itself with the Walmart vision. Flipkart will have to move from a startup mode where growth at any cost was the priority, to growth with profitability mindset. Amazon is already preparing for this battle with heavy investment in the offline grocery category.
Flipkart will have to move out of the comfort zone of selling mobile and fashion and fight Amazon in these new categories. 2019 will also test the attractiveness of FlipkartFirst vs. Amazon Prime to become the default online retailer for Indian households. A lot will depend on the continuous focus on customer experience to sell categories like grocery and furniture. If Flipkart loses this battle of FlipkartFirst vs Amazon Prime, they will find it very difficult to get hold of premium online buyers once again.
E-commerce battle shifts to a long tail
In 2018, 65 percent of India’s online retail spending came from consumer electronics, computers, and fashion products; smartphones alone accounted for half of all online spend. In order to increase the wallet share at the household level, online retailers are expected to focus on the long tail – sell a large variety of low-volume but high-value niche
Products instead of just a few varieties of high-volume but low-value mainstream products. With Walmart acquiring Flipkart and Amazon continuously increasing Prime membership, the battle is going to be in
the long tail, with Paytm Mall, Snapdeal and Shopclues also pitching in to remain relevant in 2019. We are still not sure if Alibaba will take a call on taking India seriously in 2019, but Paytm Mall will have to figure out what value proposition they are offering to customers. Currently, they are confused on what exactly they want to do.
In general, we expect that in 2019, the consumer internet sector will attract more funds from investors and will see more aggressive investment by key players. This will ensure that the industry’s loss figures remain high for the next few years.― Times of India