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Sunday, February 5, 2012

Amazon's Jungle move

The rumors were in the air for a long time, as early as 2009. And it happened on a Thursday, 2nd Feb, 2012 when, an Amazon powered comparison shopping portal was launched. There would have been last minute glitches, pushing the release to February 2 instead of February 1.

Of the many products and services that Amazon owns, launching an aggregation and comparison portal is an interesting move. It had been tried by few Indian portals in the past but to no great success. Amazon has not done it before in any other geography. One of the reasons could be the large number of shoppers visiting from India. So leveraging on,  Amazon can build a sizable customer base for its yet to be launched marketplace.

For online shoppers, Junglee can turn out to be the starting point for majority of the transactions. Rich product description, quality product reviews and product recommendations have always helped customers make informed purchase decision.

Looking at, some immediate points can be made:
  • A huge product selection offered on a Beta website. No API support yet.
  • Of the 1.2 crore product listed, 90 lakh are books.
  • The product listings are mainly from off-line sellers. Very few sellers listed have serious e-commerce presence. 
With the law on multi retail brand still hanging, setting up an E-Commerce store for Amazon is some distance away. But what will Amazon do with when is launched? 

Indeed, is a marketplace and they compete with other online sellers on their own platform. But in the current setup, it is unlikely that Junglee will list prominent Indian e-retailers and drive traffic to them. Of course, Junglee will drive traffic to apart from serving as the starting point for online shopping.

It could be a win-win situation for brick-and-mortar stores in the short term if the prices are competitive and product quality is good. Smaller cities have very few branded stores like Gitanjali, The Bombay Store and Fabindia. Shopper from these cities are already very quickly embracing online shopping.

In the past, Amazon has invested in niche shopping portals and content websites like, but comparison shopping portals is not really an Amazon thing. There seems to be a deeper meaning to the agenda.

Amazon has some serious competition in India. And there is a lot at stake. India is the world’s third largest e-commerce market, trailing China and the U.S. Indian online sales have doubled from around $4 billion in 2009 to nearly $10 billion in 2011, according to The Economic Times of India. Nearly $350 million has been poured into 40 Indian e-commerce start-ups as of year-end 2011 compared to $43 million in 11 companies two years prior.

There were speculations that Amazon will buy out an Indian e-retailer but it did not happen. With the amount of money some e-retailers have been throwing in advertising recently, it became a calling that the online commerce winner would be the one who brands it most on TV, print and other traditional media.

And this could be another reason for launching Junglee, to shake the tree and create some reasons to worry or even panic. Perhaps Amazon is targeting a specific competitor. True or not, there is bound to be some ripples. E-retailers with nothing new to offer will fold in. Established names will strengthen their foothold.

Whatever it is, the landscape is going to be more competitive. Customers will be spoilt for choice and price will not be the key differentiator, as is the case today.

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