Does Amazon Plan To Be A Threat To Indian Small Businesses?

Read about Amazon's future strategy for India.

Amazon is the world's largest online retailer and a technological pioneer. What once started as an online bookstore, diversified their business strategies and the rest is history. In a surprise move last year, Amazon Founder Jeff Bezos stepped down as the Chief Executive of the e-commerce giant, and Andy Jassy, who headed the company's cloud computing unit Amazon Web Services (AWS) is expected to take over this role in the third quarter of 2021.

In recent years, Amazon has doubled down on the Indian market, at the same time when the company lost the e-commerce battle in China to local rivals. To date, the online retail mogul has investments worth $6.5 billion in the country and over the years, Amazon has also expanded its services in the country. In India, Amazon's offerings go beyond e-commerce into sectors like digital payments with Amazon Pay, music streaming with Amazon Prime Music, grocery delivery through the website and application, video streaming via Prime video, and education with Amazon Academy. 

"I predict the 21st century will be the Indian century", said Jeff Bezos during his visit to India last year. "This country has dynamism and energy and everywhere I go here we see there is an improvement in growth. This country has something special."

Under the authority of Jeff Bezos, this is the breakout of what was Amazon's journey in India so far.

• June 2013: Amazon began its India marketplace.
• June 2014: Exactly a year later, Jeff Bezos announced that Amazon will spend $2 billion to grow its e-commerce business in India.
• February 2016: Amazon launches its touted two-hour grocery delivery service, Amazon Now. This launch was later rebranded as Prime Now in May 2018 and then as Amazon Fresh in August 2019.
• June 2016: Jeff Bezos said that Amazon would invest an additional $3 billion in India, totaling its investments to over $5 billion.
• July 2016: Amazon launches its hit Prime membership program for the Indian audience.
• December 2016: Amazon launches its payment service, Pay Balance in India. This is also the time Amazon Prime Video made its India debut.
• March 2018: India was officially introduced to Amazon Prime Music
• September 2018: Amazon acquired 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 invested an additional Rs 275 crore in the joint acquisition in September 2020.
• August 2019: Amazon acquires a 49% stake in Future Coupons, a promoter entity of Future Retail for Rs 1,500 crore. In another monumental move, Amazon opened its largest campus in the world in Hyderabad, South India.
• January 2020: Jeff Bezos said Amazon will invest $1 billion in digitizing small and medium-sized businesses in India.

The Road Ahead

• Amazon is currently involved in an ongoing court kerfuffle with Future Group and Reliance Industries regarding the acquisition of Future Group's retail and wholesale business.
• In 2020, Amazon India made a commitment to introduce 10,000 electric vehicles into its delivery fleet in India by 2025.
• This year, in 2021, Andy Jassy announced a $250 million venture fund to invest in startups that focus on business innovation, agriculture, and healthcare solutions.

Andy Jassy, who is going to take over as the CEO this year confirmed Amazon's plan of doubling down on India even as they are facing challenges from the local vendors. Local vendors are protesting Amazon's expansion tactics, demanding stricter regulations "to save the livelihoods of hundreds of thousands of small retailers." Despite this, Amazon's goal is to help India's neighborhood shops to digitize. The company plans to convert and onboard 1 million of such small stores on its platform by 2025.

"Small and medium-sized businesses are the engine and lifeblood of economies. We are passionate about accelerating SMBs", said Jassy.