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Amazon India Claims 160% Growth In Industrial Supplies Category In 2017

Amazon India Claims 160% Growth In Industrial Supplies Category In 2017

A Traditionally Offline Category, No Other Ecommerce Major Is Majorly Active In This Segment

At a time when categories like smartphones, electronics, and accessories are seeing a huge growth in India’s $33 Bn ecommerce market, Amazon India has surprisingly seen growth in one of the most untouched categories so far: the industrial and scientific supplies.

As revealed by an Amazon India spokesperson in an exclusive email interaction with Inc42, the industrial and scientific supplies category witnessed a 160% Y-O-Y growth in 2017, thus indicating the increasing adoption of ecommerce solutions amongst small-scale industry owners and businesses.

As claimed by the spokesperson, Amazon India also witnessed a 200% increase in its user base in this particular category last year.

Amazon India: Key Growth Trends Shown In 2017 For industrial And Scientific Supplies Category

  • Selection grew by over 100% in 2017 as against 2016, mainly driven by tools, instruments, occupational health and safety products and lab and scientific products
  • Professional tools as a sub-category  grew by over 160%; occupational health and safety by 180% and lab products by 150%
  • Demand is dominated by states like Maharashtra, Karnataka, Delhi, Tamil Nadu and UP
  • Top metros as per demand: New Delhi, Bengaluru, Mumbai, Hyderabad, and Chennai
  • Top five tier II and tier III cities: Noida, Gurugram, Ghaziabad, Thane, Jaipur

In January 2017, Amazon India also came up with Amazon Business Services, targeting business customers and enterprises who make bulk purchases in the similar categories.

So far, not many major ecommerce players including Flipkart, and Snapdeal, amongst others have entered this domain. Interestingly, Alibaba-backed Paytm Mall is offering a range of products under industrial supplies category.

Also, there are players like IndiaMart and Power2SME who are active in this segment along with a number of small category specific platforms like Labbazaar, Supplify, Technokart, IndustryKart, IndustryBuying and more.

Amazon India: Factors Driving Growth Of Amazon Business Services

Industrial and scientific supplies is traditionally popular as an offline category with specific enterprises dealing with a fixed set of clients as part of a long-term association.

However, Amazon India believes that “customers across the country deeply care about massive selection, great value, and fast and reliable delivery.”

“From lakhs of genuine business and industrial supplies all under one roof, we also offer our customers the convenience of hassle-free payment options via Amazon’s trusted payment methods and comfortable doorstep delivery across the country,” added Amazon India.

The company further believes that with its extensive delivery network across over 19,000 pin codes in India, the category is making branded and quality goods easily available even to Tier II, and Tier III towns and cities.

Also, the increasing Internet and smartphone penetration in the country is bringing onboard consumers from Tier IV cities, which are essentially small cities with a population in the range of 10K-20K.

Plans Ahead For Amazon India In 2018

Amazon India is currently offering over 160 Mn products on its platform in a wide range of categories, serving its mantra of becoming an ‘everything’ store for the Indian consumer.

Similar to other ecommerce platforms, while smartphones, fashion, and FMCG have usually been the traditional top categories for Amazon India, it also claims to have witnessed phenomenal growth across all key categories.

Going ahead, the company aims to continue with its vision of transforming the way India buys and sells.

“We are constantly looking at increasing our selection to encompass all products relevant to our customers including the industrial supplies selection,” the spokesperson added.

Author’s Take

The Indian ecommerce is going through an exciting phase currently. There were times when the online marketplaces were claiming top spots on the basis of an overall GMV. However, boasting about the category-specific growth is the new trend ecommerce incumbents are trying to set up.

Earlier this month, Myntra reported a 100% growth in its accessories category, while its parent company Flipkart claimed TV as its second-biggest revenue generating category.

So what’s the thought process here? Well, category-specific branding not only help companies to build their brand identity but also help increase the level of brand recall in the targeted consumer group.

Further, this also helps companies in bringing on board private labels for the most popular as well as growth generating categories. For instance, recently Flipkart launched its own Smart TVs under the electronics private label MarQ.

While Amazon India is currently enjoying its success, the entry barriers to the industrial and supplies category are not much high in India. As both Flipkart and Paytm Mall are getting pumped with funds from deep-pocketed investors, the threat to competition cannot be overlooked.

Whatever be the case, Amazon India will definitely enjoy its first mover advantage here. However, going ahead, how successful the company will be when it comes to cashing in on the growth of its industrial and supplies category will be more interesting to watch.