US based ecommerce giant Amazon is trying to strengthen its foothold in India. The company is looking at collaborations with other players to ensure that its reach extends to the semi-urban and rural consumers as well.
Building a network of offline buyers
Amazon introduced its venture ‘Udaan’, in late 2015. Through Udaan, the company wanted to utilize local entrepreneurs to assist non-tech savvy shoppers to purchase things from the marketplace.
Amit Agarwal, VP and country manager of Amazon India described the move in the following words,
“We wanted to systematically understand how to connect Amazon skill development, hungry entrepreneurs and under-served customers in a seamless manner. Across the country, there is a huge ecosystem that already serves customers with services such as Aadhar cards, bill payment and mobile recharges. We wanted to take advantage of that service-based industry.”
Tie-up with Storeking
In the same thread, Amazon has entered into an agreement with ecommerce startup Storeking. The latter operates in rural areas, and offers shoppers an assisted online buying experience. Kishore Thota, head of consumer marketing at Amazon said,
“Storeking has a very wide rural presence in south India and it will help us tap a new customer base. They also have existing logistics capabilities, which we will use to deliver products.”
Analysts support the idea, but maintain that a lot of work will be required to nudge rural consumers to buy. Harish H.V., a partner at Grant Thornton notes that leading brands like HUL have also moved to rural grounds after establishing themselves in the urban market.
“Rural is very difficult to crack. It remains to be seen how Amazon does the logistics. Will they have to create a new supply chain than the consumer goods companies and introduce new products to rural markets?”
The company has worked towards attracting a diverse buyer base with other endeavours like KiranaNow (which it recently re-launched).
The US-based marketplace is looking at cementing its position in India. While funds are not necessarily a problem for Amazon, unless it garners a solid buyer base, it will be unable to make its way to the top of the Indian ecommerce market. The company seems to be taking measured steps towards the same.