Bengaluru: Online marketplace Amazon India has expanded its product selection by three times to 80 million, added thousands of new sellers, built massive warehousing space and grown its offline shopping initiative ahead of the key festive season period next month.
Amazon (Amazon Seller Services Pvt. Ltd) now has more than 120,000 sellers, compared to 40,000 sellers a year ago. The company has expanded its offline shopping initiative to 100 cities in 14 states compared with three states, a year ago. Under its Project Udaan initiative, launched in late 2014, the company selects and trains local entrepreneurs in smaller cities and towns as well as in pockets of metros where Internet connections aren’t easily available.
“Overall, when we look at the three inputs that matter—low prices, wide selection and fast and reliable delivery— this Diwali is going to be the best experience ever for both sellers and customers. We’re certain this is going to be our biggest shopping season ever,” Amazon India country manager Amit Agarwal said. “(Because of Amazon’s seller programmes) our sellers have lower defects, lower cost per unit, which they are passing on to customers. We expect sellers to play a big role in offering low prices and great deals.”
Amazon has built significant momentum going into the festive season quarter, when e-commerce firms typically generate a large part of their annual business. This Diwali season period is more important than others because Indian e-commerce start-ups are faced with a funding crunch. Amazon has exceeded Flipkart in terms of gross sales in July and August, setting up the stage for the Diwali quarter, Mint reported 12 August.
Amazon is spending massive amounts on advertising its platform for the sales period. The company has earmarked more than Rs120 crore for marketing in the next two months, one person familiar with the matter said, on condition of anonymity. The Economic Times newspaper reported the news earlier.
“It’s a logically noisy season where users are inclined to know more about online shopping. There’s something about the festive season where you get customers’ attention. Marketing and awareness initiatives will be part of our plans but the ‘truth’ moment comes when a customer comes to your site, finds the product they are looking for, at a great price and which is delivered fast. That moment is a very powerful moment because it is the only scalable driver of getting more users,” Agarwal said.
In June, Amazon said it will invest an additional $3 billion in India after it exhausted its earlier investment pledge of $2 billion.
The company also launched its Prime membership programme in July in more than 100 Indian cities, offering one-day and two-day delivery on lakhs of products for an initial fixed price of Rs499. Agarwal said that the customer response to Prime surpassed the company’s expectations.
But some customers have complained that Prime has disappointed so far, with delivery times being longer-than-expected and a limited product selection on offer. “A large part of our customers compare our offering to the US offering. You’ll continue to see Prime eligible selection go up, you’ll continue to see more benefits come up—so very soon you’ll see all of that in India. We acknowledge that this is a journey and we need to keep adding benefits to Prime in India in the same way that Prime in the US does,” Agarwal said.