Amazon plans to add more sellers in key categories in bid to boost market share
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Bengaluru: Amazon’s India business has increased the number of sellers on its online marketplace to 140,000 and plans to add many more sellers next year in key categories such as fashion and large appliances, as it gears up to aggressively invest and expand in India where it is locked in a high-stakes battle with local rival Flipkart.
Amazon plans to continue investing heavily in India next year and indicated that increasing market share, not profitability, is its immediate priority.
“We want our marketplace to be the largest and we continue to be so,” said Gopal Pillai, director and general manager of seller services at Amazon India. He added that increasing the number of sellers was the best way to attract customers. Apart from popular choices, a large seller base will also help Amazon offer customers a “selection that is unique and hard to find,” Pillai said, thereby increasing the “value proposition”.
The number of sellers on Amazon India has now more than tripled since last year.
In January, Amazon infused an additional Rs1,696 crore into its Indian unit, arming it with more ammunition in its battle with local rivals Flipkart and Snapdeal.
Amazon India has now received at least Rs5,699 crore since July 2014, when Jeff Bezos, co-founder and chief executive officer of Amazon, promised to invest $2 billion in India over time, according to documents filed with the Registrar of Companies.
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Earlier this year, Amazon committed to invest a further $3 billion into its Indian operations.
But the huge capital infusion has come at a cost—according to documents filed with the ROC, Amazon has also incurred huge losses even as it chases market share.
“We are investing heavily in Amazon—and we are investing for the long-term benefit, and not for short-term results,” said Pillai. “Seattle (where Amazon.com Inc is headquartered) is very happy with the progress we are making and we will continue to invest heavily in India. Our goal is to transform the way India buys—and in the long run everything will work out.”
Amazon has also increased its total product selection to over 95 million products across categories, compared with about 80 million products before the Diwali season sale in October.
In October, Amazon India raised commission rates for sellers in certain categories while reducing them in others such as large appliances, after a festive season showdown with local rival Flipkart.
Amazon raised the fees for sellers on its marketplace platform in categories such as automotive accessories, mobile phone covers and cases, desktop computers and laptop batteries, and reduced the commission rates in categories such as furniture and kitchen appliances.
On Wednesday, Pillai said Amazon would continue to look at and revise commission rates for sellers in coming months, even as it would work towards increasing benefits for sellers in certain categories in terms of reducing shipping fees.