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Amazon is yet to get ‘on’line in India...
Monumental
has been the impact of online retailing on the fortunes of quite a few companies. One such destination is Amazon.com. Recently, the company reported a sky-rocketing second quarter net profits of $78 million (from $22 million for theprevious year), which is as high as three-folds, compared to the last quarter in 2006. And this was despite a relatively modest rise in sales of 35% to reach $2.89 billion.A majority of Amazon’s sales comprise electronic products and other general merchandise items, which grew in revenues by 55% to $970 million and accounted for 34% of overall business. As far as media is concerned, the book sales at Amazon rose by 27% to $1.8 billion, which included over two million pre-orders for the final edition of Harry Potter book, globally.
Retail analyst, Nolatpal Chakravarti, does agree that e-retailing is a growing concept that the industry is now quickly adopting. With respect to electronic goods being a major part of Amazon’s revenues, he comments, “As far as electronic goods are concerned – mostly comprising e-sales – the trend is not going to sustain longer, as other segments would contribute equally in the future.”
The trends of online-retailing are much visible in regions like North America & the UK as sales by Amazon are up by 38% for the former & 31% for the latter. There is, however, one bastion that still eludes retailers like Amazon – fast developing markets like India & China. On this, Chakravarti adds, “Countries like India & China are still struggling hard due to perception of people to physically feel the product & then purchase.” Concerns of credit card frauds only complicate the matters here. Just can’t win them all, eh?
Edit bureau: Disha Gandhi
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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wakes you up as Nescafé does – rightfully said and (as you’d agree) wholeheartedly accepted! Nescafé, one of Nestlé ’s internationally acclaimed beverage brands, catering to almost all segments of the market, has created an out of ordinary place in the minds of consumers globally and across the Indian sub-continent. Having sung its way to millions, Nescafé has established itself as a brand which is impossible to forget! Yes, its once popular jingle may have become scarce of late, but its Indiacentric strategy remains intact. And to further stem its position in the face of growing competition, during early 2006, the coffee-maker introduced a new variant of its instant coffee mix – the Nescafé 3-in-1, which was lapped up by consumers as ‘the perfect cup of coffee – no matter what’. After its twopronged strategy of opening Café Nescafé in early 2000s and after its last year’s strategy of targeting institutional buyers (cleverly leveraging the growth in office space), this was the next best thing from the company. Its brand strength has remained intact due to its continued endearment to the youth. However, the brand has lost some of its sheen, as the company has voluntarily curtailed its visibility in the mass market and its fresh commercials no longer retain the once ubiquitous jingle. Aggressive campaigns by HLL’s ‘Bru’ has also caused the slump to some degree.
