The battle to grab the local retail shops has grown more competitive with the entry of a new player in it. Amazon has decided to join the retail industry through its pilot project, “Local shops on Amazon.” The statement came just a day after Reliance-Facebook jumped into the retail sector to target local Kirana shops.
Amazon has entered the industry to serve as a mediator between the local grocery stores and the customers where Amazon will provide the platform where items can be listed, and consumers will be able to find the goods in the stores around in the city. It is a wonderful way to be quick in the delivery part, and customers need not wait for days to get daily necessities.
The program would benefit the neighborhood shopkeepers by increasing its digital presence, which would lead to far greater visibility and higher revenue for the retailers. Retailers can customize the regions where they would like to operate using the Amazon provided application and hire delivery boys accordingly to deliver products. At the same time, it gives customers a wider variety of choices in the same city without the hassle of walking to the stores.
Jeff Bezos took the bold call of entering the retail industry despite the strong protest from a large section of India after his arrival to the country’s capital in January this year. The country’s growing businessmen owners did not welcome the multi-national business tycoon for fear of alleged unfair and anti-competitive policies used by the company to win the market.
Also read: What are corporate plans for Indian Retails?
Nevertheless, the company has set his foot in the Indian retail market worth $200 billion by onboarding 5,000 local stores across 100 different cities in India. The platform has signed on the retailers from various categories such as home, kitchen, automotive, grocery, sports, apparel, electronics, and many others.
Amazon had sales revenue of 233 billion dollars in 2018, which is half of Walmart, the owner of Flipkart. Yet market capitalization of Amazon is far more than the Walmart. It was just a few days before when Mukesh Ambani, the chairman of Reliance Industries Ltd, announced the entry of Jio in Indian retail with the partnership of Facebook.
On the one hand, Facebook-Jio combo has around 700 million users, and the data – “the new oil of digital economy” already in their platforms. In contrast, on the other hand, Amazon is the dominant platform for digital commerce with 4.4 billion paid prime subscribers who have paid 999 rupees to avail benefits. Presently, it will be exciting to see if Walmart, too have a plan to join and intensify the competition.
Walmart owned- Flipkart already had plans to acquire a physical retail footprint to complement its e-commerce business. Flipkart will use Walmart India’s centers for stocking FMCG products such as groceries and packaged foods. In September last year, Flipkart had onboarded 27,000 Kirana stores in tier 2 and tier 3 cities to expand its reach.
Paytm, in the year 2018, had launched the Paytm mall, which is a connected Point of Sale (PoS) solution for retailers, which will enable them to manage their online customers as well. The PoS system takes care of inventory and orders on the cloud and also does instant customer billing and payment. Using the Paytm mall, retailers can fulfill online orders locally.
Meantime, the Confederation of All India Traders (CAIT) has decided to join hands with the Department for Promotion of Industry & Internal Trade (DPIIT) to come up with an e-commerce platform that would help local retailers and grocery stores. DPIIT and CAIT have decided to include Startup India and Invest India in their mission to onboard about seven crores traders of the nation, providing them an adequate digital ecosystem.
It is now, upon Kiranawalas and local shop owners to pick whose support they would likely to take. Well, a lot would further depend on the strategies and the marketing gimmicks designed by each one of the newly entered players to attract the local stores and the consumers online.