Amazon India’s next bet to be more local stores, social commerce to onboard 500 million users

Bengaluru: The local arm of US ecommerce major Amazon, which completed nine years of operations in India, will increase its focus on local stores and social commerce to tap into the “next 500 million consumers” in India, Manish Tiwary, country manager, India consumer business, at Amazon India, said in an interaction with ET.

“There is a set of people that will require a local influencer to help them shop. If you see the first part of the journey, the metro penetration moved faster. In the social commerce piece — where an uncle or an aunt or a cousin living in your building actually helps you shop — we feel very good about how we can scale it up,” he said.

Tiwary was recently promoted to oversee all of Amazon India’s day-to-day operations with Amit Agarwal now being given an additional emerging markets role along with India, which
ET reported on March 1. The Seattle-headquartered etailer said it was now looking to onboard more physical stores on its India platform to increase the number of goods that can be delivered quickly to customers. Tiwary said Amazon could deliver within two days in 93% of the pin codes it is present in India.

“I strongly believe that to get to the next 500 million customers, we need a couple of million more sellers on this marketplace. And this set of new sellers will largely be physical stores,” he said.

Amazon India currently has 1.1 million sellers on its platform. Its total user base is more than 100 million.

Last month,
Amazon launched Smart Commerce, an initiative that will help offline stores set up their own digital storefronts, in addition to selling on its India marketplace. This is similar to what Canada-based Shopify does. Amazon will enable these stores to sell on its marketplace and other platforms.

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“For more and more people to shop with us, our seller flywheel has to move. If you look at the seller ecosystem, there are manufacturers, traders, and then there is something which is very unique to India: 13 million stores. Our philosophy on selection and convenience is making us double down on stores,” Tiwary said, adding that it had already onboarded 150,000-160,000 stores on the platform.

Amazon’s focus on social commerce is in line with its recent acquisition of Glowroad which has introduced a zero-commission policy since then. According to Tiwary, the emphasis on social commerce and physical stores was an outcome of the realisation that it would need different models to cater to a market like India. It is also taking a bet on videos (Prime Video, MiniTV), voice and influencer-led commerce.

In total, the ecommerce firm has pumped in more than $6.5 billion in India and will continue to invest here across segments to grow its core commerce business like grocery. In the grocery segment, Amazon is competing with many players to get mindspace from customers. Tiwary admitted that the company should have had a better grocery offering in place by now.

“I would admit we should have had a better grocery offering quite some time back. We experimented with Pantry and Fresh … It was confusing for the customer and we folded it back into Amazon Fresh,” he said.

Tiwary said the company would continue to offer the two-hour delivery service through Amazon Fresh.

“Grocery is a huge market. There is enough space and there will be innovative models,” he said, when asked if Amazon was looking to offer quick grocery delivery service in about 30 minutes similar to Swiggy’s Instamart, Zepto, Blinkit and others. “If someone finds a sustainable way of delivering groceries in 10 minutes, we will learn from them,” he said, indicating Amazon had no immediate plans to enter the ultra-fast grocery delivery segment. Amazon’s arch rival in India, Flipkart, has started offering grocery deliveries in about 45 minutes, but the Walmart-owned eatiler is also not venturing into 15-30-minute deliveries for grocery and essentials.

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