India has seen explosive growth in the online retail industry over the last few years due to the availability of cheap smartphones, data plans and a tech-savvy young population that prefers to shop online. To tap into this growing retail market, Microsoft (News - Alert) has entered into an agreement with Amazon India to sell its gaming and entertainment products such as Xbox and Kinect.
This move by Microsoft is along the lines of the strategy taken by other companies such as Flipkart, a major online retailer, and Amazon India. On July 29, 2014, Flipkart announced that it has raised a capital of $1 billion while Amazon announced on the following day that it would invest $2 billion in the Indian market. Though these numbers look impressive, they are in tune with the overall online sales expectations in India. It is expected that the number of online buyers in India will be 39 million by 2014 and 128 million by 2018. Many companies are gearing up to take part in this online market, and Microsoft is one of them.
In fact, this is the first time Microsoft has partnered with an online retailer to sell its products. Under the terms of the agreement, the gaming portfolio of Microsoft will be available to Indian users exclusively through Amazon India. Moreover, both the companies are offering discounts to users to entice them to buy. For example, Xbox One will be available for roughly $654 while Xbox One with Kinect will be sold at $752. Furthermore, customers who pre-order Xbox One will get the popular game FIFA 15 for free. In addition to this offer, the first 1000 customers will get special offers worth $163 that include Amazon.in gift cards, two blu-ray movies, and discounts on speakers and backpacks.
In short, Microsoft and Amazon are going all out to woo Indian customers, and this strategy is likely to be a big hit among the Indian youth.