It will not surprise us if Amazon India belts out Queen’s ‘We Are The Champions’ as they are positive about winning the Indian ecommerce leader title.
The online marketplace believes that its growth rate has been tremendous and it has the potential to leave Flipkart and Snapdeal way behind in the ecommerce race. Out of the three ecommerce leaders, only Amazon’s market share increased, whereas Flipkart and Snapdeal’s market share dropped.
“We were growing at 3-4 times the rate (the overall) landscape was growing. So we exited 2015 with a very high bar for growth in 2016,” said Amit Agarwal, Amazon India’s Managing Director.
He added,
“We (India operations) continue to be Amazon’s fastest-growing geography. Pretty much in all the inputs that we track… we know we are the leader.”
Shipments increased by 250% in 2015 compared to previous year; 150% in first quarter of 2016
Two-fold increase in the number of sellers with Rs 1 crore or more annual sales
Added 90,000 new products daily to the product catalogue in Quarter 1 of 2016
55 million products listed on its platform compared to Flipkart’s 40 million
Number of active sellers has grown by 250%, which is 85,000 at present
Rutvik Doshi, Director at Inventus Capital explained that Amazon’s industry experience, which Flipkart and Snapdeal lack, is helping them to grow faster in India. Doshi said,
“Amazon’s systems and technologies which they built, learned (from), matured with and experimented with over the past 20 years are far more powerful than that of other players. Their on-ground execution in terms of building a deep and wide catalogue compared with other players, combined with their technology, makes it much easier to discover products.”
IOS had reported how the new FDI rules are affecting Amazon the most. One of the rules is 25% cap on sales from one vendor.
While it’s common knowledge that Cloudtail is Amazon’s own & biggest (40%) seller, the etailer never formally accepted it. But the etailer had to disclose to US stock markets regulator about their stake in a third-party seller.
In its quarterly regulatory filing, Amazon revealed,
“In India, the government restricts the ownership or control of Indian companies by foreign entities involved in online multi-brand retail trading activities. For www.amazon.in, we provide certain marketing tools and logistics services to third party sellers to enable them to sell online and deliver to customers, and we hold an indirect minority interest in an entity that is a third-party seller on the www.amazon.in marketplace.”
Why now, you wonder? Because it is important to reveal all possible risks to investors & regulators. Now that the foreign investment policies in ecommerce is going through a drastic change in India, Amazon had to come clean in front of its investors and make them aware about the fines, and penalties that may get slapped on them in case of any violation.
Speaking on the same, Amazon said in the filing,
“There are substantial uncertainties regarding the interpretation of PRC and Indian laws and regulations, and it is possible that these governments will ultimately take a view contrary to ours,” Amazon said in the filing. If our international activities were found to be in violation of any existing or future PRC, Indian or other laws or regulations or if interpretations of those laws and regulations were to change, our businesses in those countries could be subject to fines and other financial penalties, have licenses revoked, or be forced to shut down entirely.”
The first quarter of 2016 has been great for Amazon India. However, will the remaining three quarters be the same, better or worse than the first one? Especially now that it has to adhere to the FDI norms.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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