B2B Ecommerce Marketplaces Tolexo, WalMart & Others To Face Tough Competition From AmazonBusiness

With an aim to dominate the $300 Bn Indian business-to-business (B2B) market, US-based giant ecommerce firm, Amazon has announced the launch of AmazonSupply for small business owners and traders in India.

It’ll be called AmazonBusiness and is available at Amazonbusiness.in. As of now, the platform is accessible to users in Bangalore on an invite only basis and will be soon expanded to other cities.

The platform will allow businesses to purchase their frequently used business supplies and products for retail in bulk quantities at wholesale prices. Initially the company will invite small and medium businesses to trade online including small office and home offices, kirana stores, drugstores, hospitals, hotels, and restaurants.

Amazon stated, “With Amazonbusiness.in, businesses now have an opportunity to unblock their working capital as they no longer need to face issues like inconsistent stock availability and long vendor lead times. They can order any day of the week and get 1 to 2 day delivery from Amazon’s reliable delivery service. They also get competitive and transparent prices and invoices with their VAT and CST identification numbers.”

“Small and medium businesses suffered because of inefficiencies in the supplies procurement system. Either the fill rates were poor, or the pricing was not transparent, or the delivery options were inconvenient and vendor lead time was huge. These are the problems we are looking to address,” said Amit Agarwal, country head at Amazon India.

The businesses based out in Bangalore can register for free and place an order as low as INR 1000 and payment can be done via Amazon’s own payment gateway. The website is expected to go live in the latter half of May.

It will target office products & stationery, cleaning & housekeeping supplies, bed & bath, kitchen & dining, health & personal care, and food & beverages.

The ecommerce firm will negotiate deals with the manufacturers directly, which will benefit the small business owner and trader to procure goods at a discounted, wholesale rates.

Amazon’s new business division will be led by Kaveesh Chawla. He will report directly to Amit Agarwal. It is to be noted that, the service will not be available for regular customers. This is probably the outcome of FDI being currently banned in B2C ecommerce format, while the government allows 100% FDI in B2B ecommerce ventures.

The move comes at a time when Other players like Alibaba, which is world’s largest B2B platform recently signed MoUs with CII to lure SMBs into their portal and starting incubators to tap top rated talent. Besides, Walmart, World’s biggest retail chain has already jumped into the Indian B2B market with their portal BestPriceWholesale.co.in and is looking for some major expansion plans.

Recently, there were reports that Intel Capital-backed Indiamart sees its business-to-business (b2b) emarketplace arm Tolexo.com achieving over $1 Bn in gross merchandise value (GMV) by 2017 and $10 Bn worth of transactions by 2020.

Indian B2B market will expand to $700 Bn  by 2020. The entry of Amazon in this space will definitely heat up the market. However, we have to wait and watch that how soon Amazon will take on existing players and create its dominance in B2B segment.