SUMMARY
Amazon started as an ecommerce player in 2013 but gradually expanded its services to offer Amazon Fresh, Prime Video, Prime Music, among others in India
On the ecommerce front, Amazon claims to have 1.2 Mn sellers in India
However, it has seen a fair share of challenges as it is under the CCI’s lens and profitability continues to elude its Indian arms
Amazon marked the completion of its 10 years in India on Monday (June 5) by offering a 10% discount to sellers on the fee it charges.
Amazon, which dominates the Indian ecommerce market along with Flipkart, went live in the country on June 5, 2013. On Monday, its CEO Andy Jassy took to Twitter to share a blog post by the company on its eventful journey in India.
Reminiscing the journey, the blog post by its staff highlighted how tough the initial days were due to the lack of awareness about selling products digitally and how this gave birth to ‘Amazon Chai Cart’.
These tea selling carts navigated through the lanes and localities of the country and travelled over 15,000 kms, engaging with 10,000+ small businesses. This Indian approach worked for the company helping it expand its network of digital sellers.
Amazon has been bullish about India since its entry into the country. In 2014, its founder Jeff Bezos announced an investment of $2 Bn in the country. Since then, Amazon’s presence has only grown in India, with it entering multiple segments. While the journey has been bumpy, with a fair share of challenges, Amazon continues to bet big on India and also employs a large number of people in the country.
Let’s take a look at Amazon’s network in India, its services, challenges, and more.
The Evolution
The evolution of Amazon from an ecommerce platform to a company offering various services, began with the launch of Amazon Prime, Prime Video, Amazon Pay and Seller Flex in 2016.
Today, Amazon offers a number of products and services such as Amazon Web Services (AWS), Amazon Fresh, Prime Video, Prime Music, among others, in India.
Amazon, claims to be the only ecommerce platform in India to have partnered the Indian Railways for seamless surface movement of the shipments. In addition, the company also launched its air cargo network Amazon Air in India earlier this year for faster deliveries.
Products And Services
On the ecommerce front, Amazon claims to have 1.2 Mn sellers in India. According to a report by logistics startup Shiprocket, Amazon, which started its journey in India with only 100 sellers, sells over 4,000 products per minute. It offers 168 Mn products to customers.
It also competes with the likes of BigBasket and Blinkit in the highly-competitive online grocery market in the country through Amazon Fresh. Amazon’s online grocery service has now expanded to more than 50 cities in India and the company claims to get a significant chunk of customers from Tier-II, III cities.
Amazon’s push in India is not just restricted to the ecommerce sector. Last month, the Indian arm of AWS announced an investment of $12.7 Bn by 2030 to scale up the cloud infrastructure in the country and meet the growing demand.
In addition, the investment also aims to support 1.32 Lakh full-time equivalent (FTE) jobs in Indian businesses across verticals like construction, facility maintenance, engineering, telecommunications, and others.
Its Prime subscription, which allows customers to get two days delivery, stream videos and enjoy music and podcasts, has 200 Mn users.
Recently, the company increased the monthly and quarterly subscription price for Prime membership.
To boost the Indian content space, it also signed a Letter of Engagement (LoE) with the Ministry of Information and Broadcasting (MIB). As a part of the LoE, NFDC and IMDb will work together to increase the visibility of Indian content and talent by listing their profiles and skill sets on the ranking’s platform.
Additionally, Prime Video and miniTV will partner to provide internships, and scholarships to students at FTII and SRFTI.
Amazon is also a big-time investor in Indian startups. It launched Amazon Smbhav Venture Fund in 2021 to invest in early-stage Indian startups and has now expanded its focus to pump in capital in startups working in sectors like healthtech, gaming, electric vehicles, and more
Challenges Galore
Despite the growth in its business, Amazon’s time in India has not been without challenges. The ecommerce giant has fired over 1,000 employees in the country as part of its global layoffs.
Recently, Amazon was also reported to have deferred offer letters of several campus hires from institutes including Indian Institute of Technology (IIT) and National Institute of Technology (NIT). However, an Amazon spokesperson told Inc42, “We’re offering assistance to help address any financial impact. Amazon remains committed to university recruiting and developing the next generation of leaders and builders.”
Amazon has also been under the lens of the regulators in the country. It is being investigated by the Competition Commission of India (CCI) for unfairly promoting preferred sellers on its platform.
Besides, profitability continues to elude the ecommerce giant’s India arm despite being present in the country for a decade now. Its India marketplace, Amazon Seller Services, saw a 23% decline in its net loss to INR 3,649.2 Cr in FY22, while wholesale arm Amazon Wholesale’s loss surged threefold to INR 480.3 Cr during the year.
Amid all this, Amazon has also shut down some of its verticals in India. Last year, it announced shutting down its edtech segment Amazon Academy and food delivery service Amazon Food.
