BackAmazon India expands its global selling programme
Since its launch in May last year, Amazon's programme now has about 12,000 merchants in India selling in nine countries
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Amazon.com Inc.’s India unit has expanded its global selling programme, allowing local merchants to sell in nine countries including the US, UK and Canada, a move that could help the company attract more sellers.
Since its launch in May last year with 200 sellers who could sell in the US and the UK, the programme now has about 12,000 merchants, about 12% of Amazon’s 100,000-strong merchant base in India, selling in nine countries: the US, Japan, Canada, France, Germany, Spain, Italy, the UK and Mexico, said a senior Amazon India executive.
“In recent years, the growth of global e-commerce has made export of products an intensifying force in India’s foreign trade, offering millions of enterprises, most of which are small and medium businesses (SMBs), an opportunity to expand beyond the domestic market. There is a great demand for Indian products, not only from the millions of Indians living abroad but global consumers across ethnicities," said Gopal Pillai, general manager and director—seller services, at Amazon India.
“We offer end-to-end product solutions that include assisting sellers with imaging, logistics, tax advisory and remittance. Through Fulfilment By Amazon we also facilitate cross-border trade for exporters and large manufacturers that prefer dealing in bulk shipments," Pillai added.
Products such as wooden handicrafts, ethnic wear, health and wellness products, fashion jewellery have witnessed maximum demand. According to Pillai, Indian sellers doubled sales over their daily business on a recent Prime Day sale, held for Amazon Prime subscribers, on 12 July.
Amazon’s expansion of the global selling initiative comes after the centre allowed 100% foreign direct investment in online retail of goods and services under the marketplace model through the automatic route, albeit with a few riders that have made a large seller base even more important for online marketplaces such as Amazon, Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd). Firstly, marketplaces cannot influence prices of goods sold and secondly, no seller can account for more than 25% of the overall sales on any marketplace.
To be sure, Amazon claims to have about 100,000 sellers in India while Flipkart says it has more than 90,000 merchants. However, a chunk of sales for Amazon comes from Cloudtail India Pvt. Ltd, a joint venture between Amazon and N.R. Narayana Murthy-owned Catamaran Ventures.
Flipkart, which had a similar arrangement with WS Retail, has identified at least four large seller entities that will help it comply with these two potentially troublesome foreign direct investment regulations, Mint reported on 11 July.
Flipkart also changed its policy toward third-party sellers on its platform, charging higher commission rates in key categories, passing on costs of product returns to sellers and encouraging them to use its logistics service, as part of an effort to improve its customer service and brand, Mint reported on 24 June.
In comparison, Amazon slashed the fee it charges sellers on select items by up to 7% in categories such as personal computers, mobile devices and tablets, electronics, movies, etc. in June.
According to industry experts, an emphasis on the global selling programme will help Amazon attract more sellers as it offers them a gateway to a global audience.
“It might not make sense for every seller, but those who have a product that has a global demand will gain from this initiative. It also creates a differentiator from Flipkart or Snapdeal who do not have a global audience. Indian fashion and handicrafts have a great demand among not only Indians living abroad, but others as well," said Harminder Sahni, founder of Wazir Advisors, a consulting firm.
Since its launch in June 2013, Amazon India has established itself as the biggest threat to local rivals Flipkart and Snapdeal.
Until now, Indian companies haven’t ventured abroad, primarily because the size of the Indian market is large. E-commerce sales may exceed $50 billion by 2020 from $4.47 billion in 2014, financial services firm UBS said in a report in April last year.
Currently, it’s unclear if global sales will become a large business for Amazon India. Paytm, another marketplace, is also exploring ways of cross-selling with China’s Alibaba, an affiliate of which bought a minority stake in Paytm earlier this year.
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