Regarding Amazon India KiranaNow platform.

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Amazon KiranaNowAn Analysis of Amazon India’s Grocery Delivery Business
Bruno Cervantes, Moh’d Khalid El Mikhi, Théo Tortorici, Giulia Troina

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Bengaluru
MARKET ANALYSIS
PESTEL
Despite efforts towards globalization, India still
experiences some degree of protectionism.
Political
India’s economy is showing great promise and
continues to grow rapidly.
Economic
Demographics in terms of population, growth and
urbanization present a very favorable market.
Social
Large Internet user base is a good news for the growth
of the digital industry.
Technological
Despite India being highly restrictive on FDI, the
country is progressively deregulating.
Legal

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Porter’s 5 Forces
Main factors that affect competitiveness in the overall
industry.
Threat of
New
Entrants
Threat of
Substitute
Competitive
Rivalry
Bargaining
Power of
Suppliers
Bargaining
Power of
Customers
HIGH
Physical grocery shopping
LOW – MODERATE
Entry barriers, technological infrastructure and logistics of distribution
channels
MODERATE
Several key players of significant size and
financial resources
LOW
Low switching costs
MODERATE – HIGH
Low switching cost due to the
size and quantity of online
retailers and easy availability
of information
MARKET ANALYSIS

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MARKET ANALYSIS
Industry Analysis and Competitors
60%
10.70%
9%
7.20%
4.10%
3.60%
1.20% 4.40%
Food and Grocery Apparel
Jewellery Consumer durables, IT
Pharmacy Furnitures
Footwear Others
Number of
Stores/Items
Number of Cities
Market Knowledge
Partnerships
Sales
Revenues
Amazon India BigBasket FlipKart
Grofers ZopNow
CompetitorsIndia Retail per Category

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Strength
• Significant monetary
power
• Industry know-how
• Strong global image
Opportunities
• Loosening FDI regulatory
framework
• Rapid internet and
smartphone adoption
• Large potential market
Weakness
• Relatively new in India
• High delivery personnel
attrition rates
• Low operational
efficiency
Threats
• FDI limitations
• Collusion against
Amazon by local
companies
• FDI partnerships with
local competitors
S W
O T
INTERNAL ANALYSIS
S.W.O.T Analysis

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Biggest problem once we
shift to inventory-led model
Warehousing and
logistics Perishable goods require
special handling
Perishability
Lack of standardization
CHALLENGES
Merchandising
Quality control
Inability to guarantee quality as the
product is sourced from multiple
Kiranas
Variety of suppliers results in product
inconsistency

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High turnover bears
significant costs for Amazon
High employee
attrition rate
Expensive training for non-
tech-savvy individuals
Training of Kirana
owners
CHALLENGES
People Management

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Despite increasing
internet and smartphone
adoption
Technophobia
No information on
inventory or consumers
Bad quality of data
CHALLENGES
Technological Challenge

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Consumers like to negotiate and bargain
for lowest price on the perceived quality
of the product
Significant factor that influences
consumers’ buying behavior
Importance of trust Groceries are high-touch
products
See & Touch
Reliance on promotions and
discounts
Impulsive nature of the
purchase
CHALLENGES
Consumer Behavior
Haggling Culture

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FDI
CHALLENGES
Regulations
Regulations restrict the
scope of operations for
business
Non compliance by sellers
GST

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People
Technology
Merchandising
Rules and Regulations
Consumer Nature
Short TermChallenges Medium Term Long Term
SOLUTIONS
Roadmap
Inorganic Growth

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People
Merchandising
TIMELINE
Short-Term
• Strict screening procedure
• Discourage contracts termination
• Address motivation
• Emphasize the importance of
technology
Adopt sanitary and handling guidelines
Provide approved producer list for retailers
Establish quality control system
Introduce an inventory system
Correct handling of perishables
• A
• B
• C
• C
• f

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TIMELINE
Medium-Term
Technology
Consumer Behavior
• Good data management
• Customized Solution
• Efficient forecast of demand
• A
• B
• C
f
Marketing efforts and promotions
Increasing customer intimacy
Data driven customer relationship
management

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Regulations
Inorganic growth
• Partnering with the government
• Commitment to fuel the Indian
economy
• True competitiveness
• A
• B
• C
f
Acquisition of a competitor
Setting up strategic partnerships
Growth of infrastructure capabilities and
operational efficiency
TIMELINE
Long-Term

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CONCLUSION
As Is - To Be
Hyperlocal Delivery Model:
• Products come from Kiranas and
Supermarkets
• Amazon’s role is purely logistical
1
Decentralized Supply Chain:
• Store delivery + Amazon delivery
• No distribution centers2
No Data Implementation:
• Lack of inventory management
• No data-driven customer analysis3
Inventory-Led Retailer:
• Amazon has its own suppliers
• Revenues shift from commissions to
markups
1
Centralized Supply Chain:
• Distribution centers
• More control over quality and logistics2
Data-Reliant Operations:
• Inventory management systems
• High quality data used to build customer
intimacy
3

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