Amazon Increases Its Kirana Bet, Introduces Digital Storefronts

Global ecommerce giant Amazon has been trying hard to create a mark in India’s unorganised retail market despite continued war-cries from retailers for vying the market share. In the latest attempt, Amazon has launched Smart Stores.

Under this, the company is providing physical stores with software to maintain a digital log of the inventory they have in the shop and supplying them with a QR code. The company claims that more than 10K shops, ranging from mom and pop stores to big retail chains, including Big Bazaar, MedPlus and More Supermarkets, have deployed the company’s system.

The company said these “digital storefronts” are a win-win for both consumers and shop owners. Consumers do not need to stay inside the store and worry about handling plastic cards or cash — that is, to maintain social distance — and they will also get rewards for using Amazon Pay. Amazon said it is not taking any cut from merchants or customers.

The development comes as part of the company’s efforts to expand its delivery network and warehouses and relying on the inventory to drive sales.

The Smart Store feature allows a local shop to display its products on the Amazon app, allowing users to discover products, read reviews, evaluate offers while in the store or from anywhere using the app. After selecting the products they wish to buy their checkout with Amazon Pay, they can avail the option of UPI, balance, credit or debit cards.

Customers can on-the-spot convert a transaction into an EMI and from time-to-time avail rewards from their banks or through Amazon Pay. The bill will also be delivered digitally to make the journey contactless and seamless, Amazon noted.

Mahendra Nerurkar, CEO, Amazon Pay, said, “Amazon Pay is already accepted at millions of local shops, we are trying to make customers’ buying experience at local shops even more convenient and safe through Smart Stores. Further, through EMIs, bank offers and rewards, we seek to make these purchases more affordable and rewarding for customers and help increase sales for merchants.”

Amazon Pay said that it has partnered with leading banks to offer customers the best value and in-store purchasing experience. Earlier, Amazon said that it will be investing INR 10 Cr ($1.3 Mn) in its ‘Local Shops on Amazon’ to bring more sellers onboard.

Amazon had conducted the pilot of this programme with more than 5K local stores selling various items — electronics, apparel, toys, furniture, grocery, home furnishing. Under this, Amazon allowed local retailers and shopkeepers to leverage its technology to grow business digitally.

Moreover, these vendors can also list themselves in Amazon’s other programmes like ‘I Have Space’ (IHS) to act as delivery and pickup points and ‘Amazon Easy’ to offer a wider range of products for its walk-in customers. Amazon also believes that this could be a defining moment for local shops leapfrog the commentary of “offline vs online”, and embrace technology.

In January 2020, Amazon also decided to invest $1 Bn to digitise small and medium-sized businesses (SMBs) in India. Jeff Bezos, during his India visit, highlighted that the investment will help the local SMBs to export goods valuing over $10 Bn worldwide by 2025. This is to be achieved through Amazon’s Global Selling Program, which was launched in May 2015 in India.

The programme streamlines the process for sellers including entrepreneurs, SMEs, and manufacturers to sell their products across international marketplaces. Amazon also helps the sellers understand the demand patterns in various countries and how to boost their discoverability.