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March 28, 2018

Amazon and Apple Losing Interest in India?

Amazon, the biggest e-commerce site in the world and Apple, the most premium brands of smart phones “iPhone” seem to be losing interest in India lately. Though, both Apple and Amazon have made significant investments in India in the last few years, they have been giving less attention to the country lately. India seems to be a tough market to capture for both Apple and Amazon.

Apple and Amazon both have a specific target audience and come up with great Amazon Offers and deals to keep their consumers happy.

If we consider the statistics of the last financial year, Apple generated around 17% YOY growth for the FY 2017 in India and Amazon generated a 41% increase in its earnings in the financial year ending in March 17. However, in spite of them showing good performance in India what catches our attention is a lot less mention of the country in their talks.

But, if we have a deeper look at the market share of ecommerce sites in India, Flipkart acquired around 34% of the market share in India while Amazon stood at 29%. Though the difference seems quite less in number but the facts indicate that Flipkart being a home grown company, still overpowers Amazon. Another report generated by Morgan Stanley, shows the market share and breakup of e-commerce site in India where again Flipkart seems to have an edge over Amazon. This may be a major reason behind lesser mention of India and their declining interest. Flipkart seems to be a major opponent of Amazon in India and definitely seems to be a potential threat to Amazon’s growth in India.

As per reports published by CB Journals, Apple IPhone seems to be an expensive phone for the Indian markets and falls in the expensive phones categories for India customers. It definitely doesn’t fall in the budget friendly range offered by other brands like Samsung and Nokia.

Apple ranked second in the top five Smartphone vendors in 2017 providing a stiff competition to other competitors. However, Samsung still seems to dominate the Indian markets, given its low cost and feature rich phones as compared to the iPhone giant Apple. Pricing is a very major issue which is affecting iPhone sales in India. This also resulted in declining revenues for the company in 2017 and the company has clearly lost to Samsung and other android devices like Oppo and Xiaomi. Apple in fact had quite a tough time in India last year.

This could be a major reason behind the lesser mentions of India in the talks of Apple’s CEO. The company has been working on this issue consistently as they do not want to lose out on growing economies like India. Apple’s CEO Tim Cook mentioned in one of his interviews about how he is very optimistic and bullish about the Indian market. The company has also started investing in India and have started an “app accelerator center” in order to go for market expansion and facilitate ease in working with market channels. The last quarter of 2017 also witnessed the production of iPhone SE which seems to be a low-cost budget model of iPhone offered by Apple

Considering at a global level, a report published by CB Insights also explained how the mentions of India has got significantly low in the interviews of CEOs of Amazon and Apple. The report talks about a research done on FAMGA i.e, the top 5 e-commerce biggies of the world namely Facebook, Apple, Microsoft, Google and Amazon which analyzed their financials over the past 10 years from 2008 to 2017 to get an insight into the rankings of these FAMGA companies.

The year 2017 witnessed a great rise of Apple mentions for China, and the figures clearly indicate the shifting focus of Amazon and Apple towards China’s economy. However, the other two giants Google and Microsoft have significantly mentioned more about India in the last financial year as per the reports.

Currently, the major focus of Amazon and Apple maybe on China and other Asian economies, but it would be fascinating to find out how long would India be ignored by the mentions of these two giants especially when countries like China are heading towards saturation. India being a developing and fast growing economy, definitely seems to be a challenging market and offers great scope of development and investment.

 

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