The ecommerce space is abuzz with news that involves big names! Amazon, the American ecommerce giant which has been challenging Flipkart’s market leadership in India since it started operations here in 2013, is now preparing to launch a wholesale portal for the Indian market.
This project, which is due in early 2015, has been in the pipeline for a few months now. The wheels are in motion, since the process of finding suppliers and employees is underway. Samir Kumar, current director of category management, is likely to lead the initiative, whose reporting would be under the Amazon India head Amit Agarwal. However, an Indian spokeswoman for AMzon has refused to confirm the news of a project before its formal announcement.
The Indian portal is slated to be similar to AmazonSupply, its existing counterpart in the US. Launched in 2012 and still running in beta mode, AmazonSupply sells several categories of products, but excludes categories like apparel and furnishings. Whether the Indian counterpart would include these popular categories or not, and whether there would be no minimum selling size just as in AmazonSupply, is yet to be discovered. What we do know as of now is that the portal of the Seattle-based company would cater to small and medium sized enterprises as well.
Amazon’s growth in India has been noteworthy. Its ambitious plans for the Indian marketplace can be seen from its announcement of investing $2 billion just the day after Flipkart announced a $1 billion funding. Amazon India, which is slated to reach $1 billion mark in sales this fiscal year, has a free hand to put in a huge sum into their portal, as Arvind Singhal, chairman of retail advisory firm Technopak, exclaims, “It is important to note that there is no FDI restriction when it comes to online business-to-business operations.”
This move may be a retaliation to another big player Alibaba’s pre-IPO launch of a portal in Amazon’s home ground, which could make about 21 billion dollars for Alibaba. Though no formal announcement has been made, speculations about Alibaba aiming for an entry into Indian wholesale market are being made, especially after it set up offices in India that help enterprises in India connect to global buyers. Amazon seems determined to tap into the Indian market, which Walmart estimated would grow to $700 billion by 2020, before Alibaba, which has been hugely successful in China so far, makes a foray here.
Amazon faces competition from a number of wholesale portals that have been functioning successfully in India. Walmart, Metro and Tata B2B and IndiaMart are the top contenders, with IndiaMart, backed by 15 years of experience, seeming like the strongest.
Since Amazon is still in the process of establishing itself as the top B2C provider in India, this decision to plunge into wholesale may seem rather hurried. Whether Amazon’s preemptive strategy will work or not , will Amazon establish itself in India before Alibaba makes its way here, will the Indian market be a flourishing ground for Amazon – a lot remains to be seen in this game of wholesale thrones!
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