Though it would seem that urban demand underpins the e-tail surge in India, Amazon and Flipkart have the right idea in moving into semi-urban and rural markets as well. As per a report in The Economic Times, Amazon has already set up a delivery network in Tumkur, an industrial town, some 70 kilometres from Bangalore. In and around Tumkur, the company now averages 150 shipments daily, after just a month of starting operations. Flipkart, too, seems sold to the expansion potential. In 2014, it sold Motorola phones to rural consumers by setting up a network of local entrepreneurs who placed the orders for buyers and delivered the phones to them.
With rising smartphone penetration, and given how under-served small towns are for retail of branded products, the potential demand in semi-urban and rural areas seems too substantial for e-commerce companies to ignore. Amazon has already tied up with India Post to service 19,000 PIN codes while Flipkart has increased delivery staff in nearly 1,000 cities. The latter has also been tweaking with its app for it to work despite poor network connectivity. Once data services achieve peak performance, the demand can well be expected to surge, and the early birds would be the ones benefitting the most, having already worked out whatever operational kinks may arise.
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