As the Indian e-commerce market enters into an interesting phase with Reliance firming up its mega plans with launching JioMart, Amazon Founder and CEO Jeff Bezos is in India this week to explore the ground situation amid a possible meeting with Prime Minister Narendra Modi.
Bezos – who last visited the country way back in 2014 and his iconic picture on an Amazon supply truck along with Country head Amit Agarwal in Bengaluru, is still fresh in Indian memory – is likely to raise concerns over prevailing business environment and tweaked e-commerce policy for foreign e-tailers including the Seattle-based online retail in the country.
Amazon has pumped in close to Rs 5,000 crore in its India operations including marketplace and food retail to ward off competition coming from Walmart-owned Flipkart.
The Amazon CEO’s India visit is crucial at a time more and more Indians are taking the online route to fulfill their shopping needs but overall slowdown and negative sentiments. This coupled with a new e-commerce policy and the entry of Reliance into the e-commerce space, are set to create new challenges for Amazon. This last factor is a big challenge for Amazon as the Mukesh Ambani-led behemoth is well positioned to create massive disruption in the market.
Reliance Retail operates 10,415 stores in more than 6,600 cities and towns, with 500 million annual footfalls – giving the company the kind of scale required to swiftly launch India-based operations.
Concerned at Reliance’s e-commerce push in 2020 with online retail arm JioMart that will deliver groceries and other household essentials, Amazon India and Kishore Biyani-led Future Retail Ltd (FRL), part of the Future Group, on January 6 announced long-term agreements to expand the reach of Future Retail stores and consumer brands through the Amazon India marketplace.
Amazon India will become the authorised online sales channel for Future Retail stores and FRL will ensure the participation of relevant stores on the Amazon India marketplace, and its programmes, the companies said in a statement.
The grocery segment is a big growth area in the country this year. JioMart announced it will list over 50,000 products and will offer no questions asked return policy.
Currently in the soft-launch period, JioMart will provide savings up to Rs 3,000 to those who pre-register for JioMart before the platform goes live.
The Indian e-commerce market is expected to reach $200 billion by 2026 from the current $48.5 billion (as of 2018) and to create a level-playing field for small and medium players, the government brought in a new e-commerce policy and fresh rules around FDI in the sector.
However, this has not stopped anti-market “predatory pricing” and “deep discounting” practices as violations of the e-commerce norms continued during the year, especially in the festive season, alleged traders’ bodies who intensified the protest against deep discounts and disruptive offers by e-commerce majors Amazon and Flipkart by organising a day-long hunger strike in several parts of the country on December 27.
“We want Indian e-commerce market free from all glitches, unhealthy and unfair business practices, and till the government takes any action, our national agitation will continue,” said Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT).
The All India Online Vendors Association (AIOVA) has also filed a petition with the Competition Commission of India (CCI), alleging that the Amazon India favours merchants that are its subsidiary, such as Cloudtail and Appario.
In such a negative atmosphere, Bezos’ India visit has attracted a high-level of attention as e-commerce becomes a fierce battlefield in 2020.