Amazon Makes Debut In India Through Junglee.Com: What It Means For Buyers, Sellers, And Competitors

In early February 2011, Amazon launched Junglee.Com as a marketplace in India. In 1998, Amazon had acquired Junglee (which means "wild" in English), an online virtual database-making company, and after 13 years now it has shown its affection to the "Junglee" domain name. The reason is that Amazon can’t sell directly in India due to FDI laws that restrict foreign companies on multibrand retail in the country. Nevertheless, the Indian law does allow foreign players to operate as an online marketplace to connect sellers and buyers with each other. Amazon is following this approach by partnering with both online (Snapdeal, Univercell, etc.) and offline (HomeShop18, Bombay Store, etc.) players in the country before it makes a full-fledged entry through an "Amazon.in"-type domain. Also, Amazon just received the Indian Government’s FDI approval to set up a logistics operation. The company plans to invest INR 15 crore (around US$ 3.06 million) to set up a wholly owned subsidiary to undertake the business of online marketplace operator and retailer inter-alia courier services.

Let’s look at what Amazon’s entry through Junglee.com means for online buyers, suppliers, and competitors:

Sellers: More Business And Some Risk

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Cloud Adoption In Asia Pacific: Strong Signs Of Progress, But Not Everywhere

As of late 2011, more than half the organizations we surveyed in Asia Pacific excluding Japan (APEJ) are either currently using or actively planning cloud initiatives — 52% in fact. This number has nearly tripled since 2009.

But adoption rates alone don’t tell the whole story. Vendor strategists should also be closely tracking how organizations evolve from ad hoc, disjointed cloud projects to well-defined, effectively managed cloud procurement. Our recent survey results indicate a surprising degree of maturity across the region — along with some clear areas for growth.

  

Highlights: 

  • Centralized IT procurement of cloud services varies widely across the region. Australia (82%) and India (83%) currently lead in driving centralized procurement and management of cloud services through IT. Both markets are well above the regional average of 74%. This is no surprise for Australia, which is the most mature market for cloud computing in the region. But the strong results for India are surprising, and indicate the strong potential for a sharp increase in demand for cloud services over the next six to 12 months as early projects begin delivering positive returns. Only 66% of respondents in China are currently centralizing cloud procurement and management — not unexpected given the relative lag in cloud adoption in China relative to other APEJ markets.
  • Organizations in China are least likely to have a formal cloud strategy in place. Fifty-six percent of respondents in China currently see unsanctioned buying by the business outside of IT. This is the highest rate in APEJ by far, where the average is 35% and there are lows of 23% in Australia and 25% in Singapore.
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Mobile Governance Initiative In India: A Step In The Right Direction, But With Caveats

The Department of Information Technology (DIT) of India recently launched a paper on “Framework for Mobile Governance” that aims at providing fast and easy access of public services to citizens through mobile devices. In view of the limited success of the e-governance initiative in India (low Internet and PC penetration coupled with implementation-related issues), the shift in the government’s approach to using mobile as an alternative delivery medium for public services is a step in the right direction. According to the Telecom Regulatory Authority of India (TRAI), there were roughly 894 million wireless subscribers in India as of December 31, 2011, and it is encouraging to see that the government is finally realizing the importance of mobile in achieving its e-governance initiative. I have taken key highlights from the mobile framework published by DIT:

  • Creation of a cloud-based Mobile Services Delivery Gateway (MSDG) based on open standards, which will be shared with all central and state government departments and agencies at nominal cost to facilitate e-governance services delivery on mobile devices.
  • Incorporation of various channels such as voice, text (email and SMS), GPRS, USSD, SIM Toolkit (STK), cell broadcast (CBC), and multimedia (MMS) for mobile-based services.
  • Development of mobile-complaint sites for all government departments and agencies based on open standards.
  • Creation of a government mobile app store which will be integrated with MSDG.
  • Development of an integrated payment gateway for citizens to pay taxes and bills for other public services through mobile.
  • Integration of mobile infrastructure with the Unique Identification Authority of India (UIDAI) platform.
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Is Dell Finally Ready To Strengthen Its IT Services Activities?

In an interview with the Economic Times in India, Dell announced yesterday that it was readying a war chest of about US$1 billion for IT services related acquisitions in India. Here is why I think this announcement is important for Dell:

First, Dell needs to continue strengthen its global delivery network and industrialization capabilities. Dell bolstered its IT services market position with the Perot Systems acquisition in 2009. Since then, the company has made clear its development ambitions in India from an offshore perspective — including during the first analyst event they hosted in India in September 2011. The company lags far behind the services behemoths, including IBM, which has more than 100,000 staff in India working for international clients.

The India domestic market is also becoming a top priority for all major tech vendors. Forrester expects this market to grow by 20% in 2012 in local currency (see my recent report on the future of IT services in India). Japanese companies like NTT Data have launched aggressive inorganic growth strategies to tap this booming market (Dimension Data in 2010 — which was at the time part of the top 10 IT services firms in India via its Datacraft subsidiary — and more recently Netmagic Solutions). And Forrester expects more Japanese investments in the coming few months.

While IBM, HP, and Wipro Infotech are leading the IT services market in India, Dell is still marginal in terms of system integration and managed services activities. So it’s high time that Dell strengthens its presence in India.

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