E-Commerce Strategy: It’s Time to Own the Pipeline and the Acquisition

Posted on January 9, 2019

Amazon is quite clearly at the top of the e-commerce world for the foreseeable future. Over the past year, Walmart has emerged as its fiercest competitor for that title.

At its core, this is simply a battle of two corporations that can afford to duke it out for the throne in online retail. And both are looking to make the next great series of moves to gain, not lose, footing to the other.

So, considering this, what would it take for Amazon and Walmart to form any sort of alliance? Well, thanks to the Indian government, we’re finding out.

Under the guidance of Prime Minister Narendra Modi, India recently approved a policy that will ban both retail giants from selling private-label products on Indian shopping websites. These private labels have been used by both companies to dominate retail categories in their marketplace. (In Walmart’s case, this is targeted at Flipkart, which it purchased last year. For Amazon, it is Amazon India that may take a hit.)

The primary motive behind this move is almost certainly political. Modi is reportedly in need of boosting his standing among voters ahead of the national elections in May.

Putting politics aside, this is a strong indication of how much it truly means for an e-commerce company to own the pipeline and the acquisition. That’s what Amazon has done to perfection. Other sellers have been given access to Amazon’s massive marketplace for years, helping drive results for both parties. But at the end of the day, Amazon owns the show. The sellers have just been participating in what is essentially a data collecting operation. That data has been used heavily in the development of Amazon products, including the inconspicuous private labels. Ultimately, that leads to the small seller getting squeezed out. 

But you’re not out to build the next Amazon. You’re going for something far more humble, yet still plenty successful. So, how does any of this apply to you?

Well, you can certainly start by building toward owning the customer’s attention. Amazon has used sellers on its marketplace to do that. You can do it by way of entertainment through content and interaction, among other things. Once the attention is attained, you can exploit it by applying what your customer data tells you to produce greater future results. This is the new-age longterm strategy for success. It’s one of the driving forces behind optimizing for customer lifetime value.

The news from India actually helps prove the effectiveness of this strategy. It has taken action from the government to potentially slow Amazon’s momentum in the country. The owning of the pipeline and acquisition has been such an advantage there is no other force that could stop it. So while the news may be negative for now, it also gives validation to this e-commerce strategy as a whole.