There has been some heated controversy going on amid the successful start of Amazon in India. The marketplace giant launched with better than expected numbers coming in, but Flipkart, Amazon’s major rival in India, has made an amazing turnaround and so the race is on. For the past several years the economy in India has been staggering a bit, and so these two marketplaces just might rekindle hope for India’s future in e-commerce.

India’s Continued Growth Overall

The race may be on, but will it really matter who comes out the winner if their efforts can bring about the changes needed to put India back on the map again as a key player? Thought to be the most promising of all emerging nations, this nation with 1.25 billion inhabitants is quickly gaining momentum because of the entrepreneurial spirit of the largest portion of the population – India’s young adults.

While there have been some setbacks, they pale in comparison to those which many of the world’s superpowers are experiencing. Uncertainty still looms over Brexit in the UK and it is unclear what the highly controversial US president will do for the economy of the United States, so India is in a prime position for massive growth. Amazon and Flipkart are just two of the reasons why there is hope for the future.

India’s Youth Answering the Call

Since such a large portion of the population is young and with a high priority placed on education, India is in a prime position to literally explode in the technology sector. As e-commerce expands, India just might set the pace for the advancement of a digital economy in the region, according to US marketing agency Single Grain. With China also making a move towards expansion in the free-market, these two nations may soon enjoy a place of global dominance in the technology sector once dominated by Japan.

The reason why India is looking towards the younger generation isn’t only because of their sheer numbers but because of their thirst for knowledge and a will to succeed. Saying India’s youth have a pervading entrepreneurial spirit is an understatement at very best. It is more of a passion for working towards a better future for their impoverished country and Amazon and Flipkart might just set the stage for this generation to elevate the GDP far above where it now stands at less than a quarter of China’s per capita.

E-commerce Offers a Better Future

As one of the world’s poorest nations and sadly one of the four most populous, India lacks the infrastructure that many other emerging nations now enjoy. Pumping money into the system will enable the Indian government to update that very same infrastructure that is holding the nation back.

With travel and communications often hindered by this very lack of updated infrastructure, e-commerce takes on greater significance. Startups can work from home with just a computer and an Internet connection, and that is likely the one factor that will bring India up to the ranks of finally being a ‘developed’ nation and a global presence to contend with.

China has always been a lucrative market for the e-commerce business with its 770 million+ working population and their love for shopping online. The real situation, on the other hand, is a little different than what someone inexperienced with the Chinese market might presume. Although it is the biggest e-commerce market in not only Asia but globally as well, it is nothing like any other market in the world. As many big brands batten down the hatches in realisation of this fact, let us take a close look at some of those shutdowns.

Lotte

Lotte Group Retail has been in China for the last two decades and currently has five shopping malls and 115 supermarkets in the country. However, the group’s first attempt at opening an online mall (Tmall) came to an end this January when sales fell well below expectations during the last quarter of 2016 as compared to Q4 2015. The South Korean MNC had not been seeing too much growth in China recently and as was made evident by the closing of the Tmall, e-commerce wasn’t working for them either.

ASOS

The prospects of e-commerce are bright in the UK and reliable VPS hosting UK makes sure that even emerging online businesses never have a bad server day. This positive experience at home led ASOS to believe that the company could make it in China as well, and the biggest online fashion retailer in the UK entered China with a bang in 2013. They poured in over a hundred million RMB into the market and developed a sales team, opened its own website as well as a Tmall, and imported the best of the British contemporary style it had to offer. All that effort and optimism came to an end in April 2016, when they decided to close shop and leave China for good, with a loss of 4 million GBP! It was a mix of import taxes, complex Chinese clothing trade regulations, ineffective marketing, and stiff competition from local Chinese competitors that ultimately pushed the huge brand out of China.

Coach

Coach, the US luxury brand in handbags launched its first official Tmall in 2015 and closed it down in September 2016! They did give a vague explanation along the lines of “shifting operational strategy,” but it wasn’t really a secret. Just like many other foreign established brands venturing into China, Coach just wasn’t making a profit that justified its Tmall. Coach, however, has not yet left the Chinese online market completely. The company has realised that WeChat is probably the best platform for online businesses in China right now and continues to remain quite active there.

As one can see from the examples above, in spite of China being the largest online retail market in the world, it isn’t a place where a business can enter with pre-conceived notions and zero market research, irrespective of their stature in the outside world. Understanding government regulations, logistics, and the unique Chinese market are some of the aspects of e-commerce that should be thoroughly researched and assessed before entering the nation and its fiercely competitive online market.