Why Small Traders in India Fear the Amazon Effect

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Amazon is the world’s largest online retailer and tech pioneer. Once started as an online bookstore, his business strategies change and the rest is history. In a surprise move last year, Amazon founder Jeff Bezos stepped in as the chief executive of the e-commerce company and Andy Jaisi, who led the company’s cloud computing unit Amazon Web Services (AWS), is expected to play the role in the third quarter of 2021.

In recent years, Amazon has doubled in the Indian market, while the company lost to local rivals in the e-commerce war in China. So far, the online retail mogul has invested $6500,000,000 in the country and Amazon has expanded its services in the country in the last few years. Amazon’s offering in India goes beyond e-commerce to sectors like digital payments with Amazon Pay, music streaming with Amazon Prime Music, grocery delivery through websites and apps, video streaming via Prime Video and education with Amazon Academy.

Jeff Bezos, who visited India last year, said, “I guess the 21st century will be the Indian century.” “There is mobility and energy in this country and we see growth has improved wherever I go here. There is something special about this country.

Amazon’s journey in India has so far broken down under the authority of Jeff Bezos.

  • June 2013: Amazon launches its India market.
  • June 2014: Exactly one year later Jeff Bezos announces Amazon will spend $20,0,0,000 to expand its e-commerce business in India.
  • February 2016: Amazon now launches its two-hour grocery delivery service, Amazon. The launch was later rebranded as Prime Now in May 2018 and later rebranded as Amazon Fresh in August 2019.
  • June 2016: Jeff Bezos says Amazon will invest an additional $3 billion in India, exceeding $5 billion for its investment.
  • July 2016: Amazon launches its hit Prime membership program for Indian audiences.
  • December 2016: Amazon launches its payment service Pay Balance in India. This is also the time when Amazon Prime Video made its debut in India.
  • March 2018: India officially introduced on Amazon Prime Music
  • September 2018: Amazon acquires Aditya Birla Group’s grocery retail chain More for Rs 4,050 crore, jointly with private equity firm Samara Capital. Both Amazon and Samara Capital had invested an additional Rs 275 crore in a joint acquisition in September 2020.
  • August 2019: Amazon acquires a 49% stake in Future Coupon, a pioneering unit of Future Retail, for Rs 1,500 crore. In another massive action, Amazon opened the world’s largest campus in Hyderabad, south India.
  • January 2020: Jeff Bezos says Amazon will invest $1 billion to digitize small and medium-sized businesses in India.

Road Ahead

  • Amazon is currently involved in an ongoing court kerfuffle with Future Group and Reliance Industries regarding the acquisition of the retail and wholesale business by the future group.
  • In 2020, Amazon India committed to introducing 10,000 electric vehicles in its delivery fleet in India by 2025.
  • In 2021 this year, Andy Acy announced a $250,0,000 venture fund to invest in startups focused on business innovation, agriculture and health solutions.

Andy Jaisi, who will take over as CEO this year, has confirmed Amazon’s plan to double India as it faces challenges from local vendors. Local vendors are opposed to Amazon’s expansion strategy, demanding strict rules to “save the livelihoods of hundreds of thousands of small retailers.” Despite this, Amazon aims to help digitize India’s neighbouring stores. The company plans to convert and turn on 1,000,000 such small stores on its platform by 2025.

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