Amazon is further doubling down on India’s massive small-business base to remain a dominant player in the Indian e-commerce sector. The company on Thursday announced a new initiative ‘Local Shops on Amazon’ to help customers discover and buy products from their local shops.
Amazon’s announcement to boost such hyperlocal transactions by getting more customers and sellers to transact online interestingly comes a day after the Indian e-commerce and technology sectors witnessed a watershed deal with Facebook’s mammoth $5.7 billion investment in Mukesh Ambani’s Reliance Industries and agreements between Jio Platforms and WhatsApp.
The deal, following necessary approvals, will likely make Mukesh Ambani’s grocery endeavour through JioMart and WhatsApp possibly the biggest challenge in India ahead for Amazon and others such as Flipkart, BigBasket, Grofers etc.
Amazon said the new initiative will help “shopkeepers supplement their footfalls with a digital presence and expand beyond their normal catchment,” according to a statement. The deliveries will be made by shops themselves, within the same or next day of the order placed, given their proximity to customers.
Amazon has been piloting this programme for six months with more than 5,000 shops based in over 100 cities including metros, tier I and II cities. The sellers part of the pilot belonged to categories such as kitchen, home, furniture, apparel, automotive, beauty, electronics, grocery etc.
For regional or national expansion, these local shops “can choose to work with Amazon to fulfil their orders,” and can also use Amazon Delivery app for providing delivery updates to customers and Amazon and shipment tracking, the company said.
Amazon was launched in India in 2013 and since then has grown to over 5.5 lakh seller base on its marketplace. Its CEO Jeff Bezos on a recent trip to India had said that the company plans to get over 10 million (1 crore) micro, small, and medium-sized sellers online by 2025. Bezos had also pledged $1 billion investment to digitize small businesses. This will take took Amazon’s total investment in India to more than $7 billion.
However, Amazon and Walmart-backed Flipkart would need even stronger muscles to remain dominant players and compete with Reliance. “Current investment and price by Amazon and Flipkart in their grocery segment are not good enough. They are struggling a lot,” Satish Meena, Senior Forecast Analyst, Forrester Research had told Financial Express Online.
