Amazon India is gearing up for the imminent e-commerce clash with the Indian conglomerate Reliance Industries Limited (RIL) by adding its own set of provision stores. Amazon fresh forayed into metro cities of India such as Mumbai, Delhi, Bangalore, Pune, Kolkata and Chennai. Amazon plans smaller acquisitions, signing up thousands of stores to sell products through its e-commerce platform, unlike Reliance Retail, who is willing to court millions of such retail shops as its multi-channel retail play strategy. Initially, Amazon planned to sign up small-sized mobile phone sellers and will ultimately scale it up to others, selling everything very much from general merchandise to food. Previously, such neighborhood grocery has been reluctant to the utilization of technologies and had the ambiguity of not having formal inventory software. This may just be the perfect time when giants like RIL and Amazon utilize their immense audience base to power their use cases to spawn a robust supply of orders.
Amazon has already started functioning on the strategy and made a deal with ShopX, a Bengaluru-based retail operating system that digitally connects large retailers and FMCG companies with kiranas. Through strategic programs such as Amazon Easy, Service Partner, and I Have Space, among others, the company has been long working to facilitate small and medium-sized businesses such as kiranas. Through its I Have Space program, Amazon has allied with about 20,000 kiranas in 350 cities. These stores will deliver goods for Amazon within a radius of 2-4 km of their shops. Tens of thousands of kiranas will actually sell their wares on Amazon.in under this initiative.
In May 2019, it was reported that Flipkart, an e-commerce company based in Bengaluru, was maneuvering a program in Telangana to partner with more than 500 small shopkeepers to vend mobile phones through its app. Even the Walmart-owned companies are planning on to court around 15,000 beauty salons, small convenience stores, bakeries and pharmacies, to vend mobile phones, a consumer electronic that no such shops usually stock. Grocery remained largely untapped. Even after 15 years of e-commerce business in food retailing, it is still not grown much with less than 10% market share, for overall food retail, compared with 50% in travel and 35% electronics in mature markets.
Years of stalling, global retailers failed to influence the Indian government to unveil its market to foreign competition, because of the threat of putting out millions of neighborhood stores that cover around 90% of the country’s retail business. As e-commerce boom continues in India, online ventures are tapping into the estimated 12 million mom-and-pop outlets network to sell products through them as part of omni-channel strategies and even be utilized as the last-mile delivery agents. More and more platforms are aggressively trying to get the kiranas on-board. Modern retailers don’t account for much with about 10% of the country’s $650 billion annual retail industry with small-sized shopkeepers holding influence over 90% of the industry. Kiranas, once an obstacle, are now lucrative opportunity for Amazon, Walmart, and Reliance for dominance of the Indian e-commerce market.
