We know already that Amazon (NASDAQ:AMZN) is entering the Indian market pretty soon. But the approach the online retail giant is taking to enter this market is both different and intriguing.
According to Medianama, Amazon is joining hands with various homegrown e-commerce portals to launch an open platform-style marketplace in India. This marketplace will reportedly showcase products from its e-commerce partners with Amazon taking care of the payment system. The online retail giant is expected to take 2 to 7 percent commission on sales, with the exception of clothing where it is expected be much higher.
One of the e-commerce portals which is tying up with Amazon told Medianama on condition of anonymity that the retailers on the platform will have to provide Amazon with an XML-based product list, customized to the latter’s categorization – and they (retailers) will be responsible for delivery.
Further, each of these retailers will be reviewed and rated by consumers based on their experience. Added to that, Amazon will also be managing the website front-end and is reportedly in talks with a logistics company to buy them out.
While there is no information on which e-commerce companies are partnering with the Seattle-based retail giant, the Times Of India had previously reported that the company is in talks with Flipkart, LetsBuy, and Exclusively.in among others.
Why this approach?
If you are wondering why other e-commerce companies are flocking to join Amazon’s Indian marketplace rather than staying independent and fighting the competition? It’s quite simple. Amazon’s consumer traffic from India is already higher than these homegrown e-commerce ventures, despite zero sales presence in the country, as noted by Medianama.
Also, note that Alibaba’s Tmall has a similar approach in China, where smaller rivals are flocking to its open B2C platform.
According to R. Sriram, ex-CEO of Crossword Bookstores and co-founder of consulting firm Next Practice Retail, Amazon’s customer traffic from India is already four times that of the top online Indian retailer. Hence, e-commerce ventures are jumping on board to gain an additional revenue channel.
Any guesses on who Amazon India’s launch partners will be? Let us know in comments below!
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