Small and medium businesses (SMBs) are the backbone of any economy and in a country like India where there are more than 60-70 million SMBs, they play an extremely important role, contributing to a significant portion of consumer consumption spending as well as boosting retail GDP. SMBs are also the fiercest critics of online retail, with brick-and-mortar retailers accusing e-commerce giants of violating Indian law with deep discounts and discriminating against them by promoting big companies.
In what can only be seen as a goodwill gesture, Amazon’s Jeff Bezos last month said his company will invest US $1 billion to bring small businesses online in India. Amazon has had a long-standing relationship with SMBs in India, with the company claiming that in the six years that it has been in the country, the number of SMBs on-board has gone from just 100 to over 5.5 lakh.
“Amazon has more than 60,000 manufacturer and reseller SMBs exporting to 12 different marketplaces around the world. We also enable more than 8 lakh artisans and weavers through our Amazon Karigar program and 2.5 lakh women entrepreneurs through the Saheli program,” explains Gopal Pillai, Vice President, Amazon India Marketplace.
“We are aiming to bring 1 crore SMBs online with us by 2025 and we will generate US$ 10 billion in cumulative sales through the exports program,” he adds.
Further to its plans of strengthening micro, small, and medium enterprises (MSMEs) in India with its US$1 billion investment, Amazon announced plans to digitally enable MSMEs and traders across India, including manufacturers, resellers, local offline shops, and brands. As part of this effort, Amazon will establish 100 Digital Haats in cities and villages throughout the country to help businesses integrate into the digital economy. The Digital Haats will provide services like e-commerce onboarding, imaging and cataloguing, warehouse space, logistics, digital marketing, and compliance. These haats will be in local neighbourhoods and available to MSMEs irrespective of their association with Amazon.
To support local neighbourhood shops and kiranas, Amazon will be expanding the Amazon Easy and I Have Space programs to provide additional income opportunities. Through Amazon Easy, kirana stores will be able to set up kiosks to provide assistance to their customers in choosing the right product, placing an order on Amazon and earning commission on the sales. Through I Have Space, local stores can expand their income by using their shops as mini-delivery centres and delivering products ordered on Amazon in their neighbourhood.
Interplay Between Online & Offline
Interplay between online and offline has seen a radical change over time with unique seller success stories.
“E-commerce is already creating a level playing field. Amazon opened up doors for many players and once these brands became popular online, offline stores also started accepting them. So earlier, it was brands becoming popular offline and then going online. Now the reverse trend is happening. It is a hybrid model,” Pillai states.
Amazon has presence in 200+ categories across the globe and it plans to add more categories.
Amazon B2B Marketplace
In 2017, Amazon launched B2B marketplace in India. It is geared towards making small and medium businesses shop from Amazon.
“Our intent is to make Amazon Business a destination for businesses to buy from and also help them become their procurement partners and in doing so we have a whole host of services that we end up providing. From 2017 till today, we have seen a significant increase in customer adoption. It has increased almost 11 times. Amazon moved away from just being a consumer-focused business to also aiding businesses in their transactions,” says M Peter George, Director, Amazon Business Marketplace.
“We have 3.5 lakh sellers that transact with us, we have got 15 crore products. India was the 5th marketplace that we launched globally,” he adds.
SMBs have an opportunity to save from around 10-15 percent just by moving on to e-procurement. The benefit of e-procurement is that it does away with the middleman altogether.
Scope of SMBs in MENA
To have presence in the MiddleEast market, Amazon acquired Souk.com in 2017 and at present, it has presence in around 24 categories. “In each category we are making sure we off er more depth, more selection and more direct entrepreneurship brands that off er high quality at a reasonable cost,” says Ronaldo Mouchawar, Vice President, MENA.
“At this point, we only want to concentrate on the B2C side. We are more interested to bring more products into our region. We are trying to leverage the bridge by bringing the customers to the products and products to the customers,” he adds.
Textiles, leather goods, health and beauty are the fastest moving categories.
The MSMEs were already on our platform on global selling, however, we keep on giving them access to more and more destination markets and more countries. The seller-central platform gives consumer insights based on ML and tells which products are doing well, sellers can choose which of these products make sense to them and list them on their own. The sellers can decide that at what prices they want to sell their products at, and we help with logistics. When all of this is done, we do the cross-border payment which comes into an Indian account. The whole pursuit is to keep bringing the barrier down, so that every MSME who is motivated and wants to do export should do it,” concludes Abhijit Kamra, Director – Global Trade and Exports.