Nearly 16 hours or 740 km north of Delhi is the cold desert mountain valley of Spiti , nestled among the Trans-Himalayas. It is often cut off from the mainland by snow drifts from early October every year. But around Diwali last year, internet commerce giant Amazon, in its quest to dominate India’s ecommerce market, made its first delivery to this region of some 34,000 inhabitants in Himachal Pradesh For the Seattle-based Amazon, which has bet $5 billion on its India operations, this exploration of the hinterland is just another of its moves to extend the seeming duopoly in the country’s internet commerce market where Amazon and arch-rival Flipkart (fresh from a $2.5 billion fund-raise, increasing its kitty to $6 billion) are distancing themselves from the competition.With wary venture capitalists drastically cutting their investments in cash-burning startups and biggies like Amazon, Uber and Ikea splurging on their India operations, the top two players in many categories — from furniture to foodtech — are standing out from the herd. It is a battle of the big two, the two-horse race of these times. With consolidation sweeping across sectors, these companies, cherry-picked by marquee investors and corporations, are stretching their legs and increasing the gap between them and the rest.Says Amit Agarwal, senior vice-president and India head, Amazon: “We have managed to make Amazon the biggest store in India with over 100 million products, of which nearly 2.4 million are available for next-day delivery.” As it seeks to dominate the Indian market — online and increasingly offline — it has pushed the envelope on logistics and innovations. “We launched the concept of guaranteed one-day delivery within six months of our operations.” In the four years it has been in business in India, ecommerce has morphed from being a particularly urban phenomenon to branching deep into rural areas. If Amazon is focused on what consumers want — selection, value for money and convenience — it has invested in infrastructure, technology and India-specific innovations to drive this transformation.“It is still Day One for online shopping — and for us — in India, but we are excited to see ecommerce evolve into what it should be in a diverse country like this,” adds Agarwal.If the first one lakh sellers on Amazon India signed up over three years, the next one lakh were snapped up over the last 12 months. “With the launch of Prime last year, guaranteed one-day and two-day delivery became an everyday experience instead of an occasional indulgence,” claims Agarwal. “Prime membership has more than doubled since January 2017.”If Amazon is blazing a trail in the horizontal ecommerce market, specialists in several segments are looking to take a leaf out of its playbook and press home their dominance.“In the horizontal (travel) space, there is no room for Player No. 3 or 4,” says Ashish Kashyap, co-founder and president, MakeMyTrip, the country’s leading online travel portal.In October 2016, MakeMyTrip further strengthened its position when it merged with Naspers-funded Ibibo. “Given the network effects in the horizontal platforms (effect one user of a good or service has on the value of the product) and lower average selling price in the Indian market, it is likely that top two players will consolidate,” says Kashyap.Despite the urge to be among the top players, some entrepreneurs and investors have a different view of how the market will shape up. Ashish Goel, CEO and co-founder of online furniture brand Urban Ladder, reckons the narrow narrative needs to be reconsidered. “My race is with Ikea and Home Centre,” he says. “We are in the business of building a differentiated brand and my biggest challenge is consumer behaviour, not my closest online rival.”For entrepreneurs like Goel, staying on top is also about remaining relevant. In the US, a brand like Fab went from raising $336 million to insignificance in a matter of months. Closer home, Style Spa, which was known for its eye catching furniture design, has struggled to retain novelty. “In this market, timing is everything,” says Goel.Serial entrepreneur K Ganesh thinks there are plenty of opportunities beyond cluttered markets such as online grocery and furniture. “There are certain sectors like horizontal ecommerce where leaders have already emerged. Outside these, most areas are open for investors,” he says. “Sectors such as wellness, nutrition and health foods are almost unaddressed and need special sector and domain focus — unlikely to be effectively catered by horizontal players.”However, investors are voting with their wallets in this market, narrowing their choices. Consequently, smaller players are suffering. For example, in February 2017, Stayzilla, once backed by Matrix and Nexus, ran aground, unable to raise fresh funds, and its CEO Yogendra Vasupal was arrested a month later for defaulting on payments.Kashyap thinks a clear-out is likely. “Players and platforms that are delivering real value will have an opportunity to consolidate with larger ones. Meanwhile, horizontal players that are diminishing or on a decline and bring nothing unique to the table… would be best left to die.”Sriharsha Majety, founder and CEO of Swiggy , a venture centred on food delivery, has seen many of his rivals flourish and flounder over the past 12-18 months. At its peak, there were 20-24 ventures in this space, raising millions of dollars in funding and promising the moon. However, as consumers started to pick favourites and investors started asking difficult questions, many faded away.“While there is a continuous focus on customer experience and retention by way of value added services and efficiencies in the supply chain, the brands that are innovating to solve real consumer problems are seeing rapid growth,” says Majety. “Swiggy has built superior technology that not just ensures a seamless ordering for consumers, but also enables features such as live order-tracking, and an industry-best delivery time that is made possible through complex routing algorithms,” he claims.While consumers benefit from this as these initiatives make food ordering more reliable and convenient, these also help delivery executives and restaurant partners optimise their time and efficiency. After emerging relatively unscathed from a foodtech meltdown, Swiggy and arch-rival Zomato have become the two dominant players in this market, leaving rivals far behind.“Food delivery apps like Swiggy are high-potential habit formers. Our focus, therefore, will always be on adding more variety and ensuring affordability of offerings over the next few years,” says Majety. “If we keep the consumer at the front and centre of the business and solve their problems, we shall continue to be their brand of choice.”Despite lofty claims from the likes of Swiggy, investors are wary of over-committing even to seeming market leaders. “The winner-takes-all dynamic can work against an incumbent and quickly erode its relevance. The examples of Snapdeal (a one-time No. 2) FreeCharge and Foodpanda are ominous reminders of this,” says Shubhankar Bhattacharya, venture partner, Kae Capital, an early-stage investor. “The odds of success for a No. 3 or 4 are that much lower unless they have momentum and are gaining market share by their differentiation.”Many investors are less than enthusiastic about funding a No. 3 or 4, which could eventually be acquired by a market leader. “We see limited capital availability from the third player onwards in tech-led consumer segment,” says Sunil K Goyal, founder and CEO, YourNest, an early-stage fund. “Hyper-competition actually kills investor returns across the sector, making consolidation imperative.Sectors such telecom, ecommerce, food ordering, taxi booking, travel ticketing are poised for a two-horse race in the long term.” This wave of consolidation is affecting the choices of early-stage investors too. For example, YourNest’s partners agonised over an investment in a twowheeler taxi startup, but backed away due to fears of Uber and Ola foraying into it — which did happen a few months down the line.Vinay Sanghi, founder, CarTrade, which claims to be the largest player in the online auto classifieds space, is leveraging the lead and thinks there are few opportunities for others to scale. “Though there is space for multiple players, it won’t be easy for them to scale up. So investors might find it difficult to back smaller players,” he says. Investors have put their money to work with CarTrade, with investments of $230 million from the likes of Tiger Global , Temasek and Warburg Pincus.“We have over 22 million unique customers visiting our platform monthly. Over 7,000 new cars and used car dealers use these platforms. On Google Trends, CarWale (which was acquired by CarTrade in 2015) is around eight times its next vertical competitor,” says Sanghi.However, competition may be hot on its tail, with CarDekho, backed by Google Capital and Hillhouse Capital and which claims to have clocked over Rs 80 crore in revenue in 2015-16, acquiring Gaadi.com and ZigWheels to deepen its presence.“As you grow, your agility goes for a toss,” admits Sanghi, but adds, “We have made sure that despite growing and posting over `100 crore revenue, we do not slow down in terms of innovation.”Meanwhile, Anurag Jain, co-founder of GirnarSoft, which runs CarDekho, Gaadi and ZigWheels, wants to leverage on its size and show that elephants can indeed dance, with plans to turn a profit by March next year and revenue forecast to jump to Rs 170 crore from Rs 100 crore now.Other segment leaders are also leveraging scale to their benefit. In the online furniture market, Pepperfry hogs two-thirds of online traffic, according to one estimate, and has raised over $160 million since its founding. Pepperfry founder Ambareesh Murty, who previously headed eBay India, says it is gaining market share and traffic at the expense of smaller rivals. As consumers rationalise their online shopping choices, leaders benefit.“As we get control of more of the market, it is easier for us to plan strategy — from expanding into adjacent categories to fine-tuning our supply chain — even as discounts begin to disappear,” he says. On the ground, this means faster delivery — 12 hours from 36 earlier in the Mumbai suburb of Bandra, for instance — as business blooms in a borough with frequent deliveries.Keeping this momentum won’t be easy though, with Swedish furniture maker Ikea’s launch imminent in India. “Our customers will continue to get the best value in the industry and our prices will be unmatched,” says Murty.Claims apart, he will be acutely aware of the frailties of the market, which saw Future Group merge FabFurnish — once burnished by the deep pockets of Rocket Internet — with Home Town. A market leader doesn’t have to make a big splash to make an impact, says Deepinder Goyal, CEO and founder of Zomato. “We were among the last players to enter the food ordering market in June 2015. But the gap with the biggest competitor (in food delivery) has narrowed to a small difference.” Even though Zomato is valued north of a billion dollars and has raised over $223 million in funding, he’s ensured the firm sipped on its cash reserves, spending only $7 million to make these inroads.Zomato is on the move in a market that was once crowded, but has rapidly cleared out. “The average order value for India is Rs 420, while the average commission earned is 8% and our GMV exceeds that of our nearest competitor. We already have over 7,500 exclusive restaurants with us in India, and this number is growing, with 300 more added every day,” says Goyal.Some entrepreneurs, however, argue that as opportunities eventually arise outside of the initial 100-120 million adopters, the theory of just two companies dominating one sector may be half-baked. “We don’t believe that a single player can be everything to everyone… ShopClues is No. 1 in tier-3, -4 India which is Bharat,” claims Radhika Aggarwal, co-founder, ShopClues. “We target a very different market segment. Our most loyal buyers buy up to 25 times in a year.”Despite this grandstanding, Amazon’s Agarwal isn’t likely to be worried. “In our experience, the true potential of ecommerce is when anyone, anywhere has access to this choice and anyone with an intent to sell can participate in providing this choice,” he says. In the past 40 days alone, Amazon has ventured further to Mokokchung in Nagaland, Bakultala in Middle Andaman and Almiankande in Uttarakhand as it seeks to extend its presence — and dominance – in the Indian market. For those trying to keep up, forewarned is forearmed.(Amazon India's revenue, in line with being a marketplace, only indicates the seller commission earned by it and isn't its entire merchandise revenue.)