Jeff Bezos announces over $1b investment to digitize Indian sellers

Amazon founder and CEO Jeff Bezos on Wednesday announced an investment of over US$1 billion, a gift for small and medium-sized businesses in India, during his recent three-day trip in the country. Indian physical retailers, however, seemed unimpressed by this as they continued with their protest and sloganeering of “Amazon, go back.”

Photo credit: Amazon

During the trip, Bezos interacted with Amazon India country head Amit Agarwal at an event in New Delhi. He said the investment will go towards digitizing Indian SMEs.

Amazon India, Bezos said, will leverage the global footprints of the parent company to export “Make in India” products worth US$10 billion by 2025, a process that has already started. “We are announcing it now, but it is already working. When something works, you should double down on it.”

Additionally, according to Amazon India’s regulatory filings with the Ministry of Corporate Affairs, Amazon has invested 17 billion rupees (US$240 million) into its payment and wholesale business in India.

The US e-tailer competes with Walmart-owned Flipkart in India, and the US$1 billion pledge will go towards warding off the rising competition. A part of the investment will be used to expand the reach of its existing “Digital Haats” in 100 cities, villages, and communities. A haat is a makeshift market that comes and goes in Indian hinterlands and small towns. The funding will be used to provide services such as ecommerce onboarding and cataloging as well as warehouse spaces for small businesses.

In its bid to install more resources for SMEs, it will also increase the capacity of its “Amazon Easy Program” to help neighborhood stores set up digital kiosks for their users to learn to place an online order from Amazon.

During his interaction with Agarwal, Bezos indulged in a few feel-good one-liners to woo the audience and Indian regulators. “I want to make a prediction for you: the 21st century is going to be the Indian century,” he said inviting claps and hooting from around 3,000 SME owners sitting in the audience. He went on to give one more prediction: “In this 21st century, the most important alliance is going to be the alliance between the US and India, the world’s oldest democracy and the world’s largest democracy.”

In contrast, on the same day, the Confederation of All India Traders, an industry body of over 70 million businesses, held several protest rallies in the city ahead of Bezos’ visit. His visit also came at a time when India’s antitrust body, Competition Commission of India, on Tuesday gave a green signal to investigate the business practices of Flipkart and Amazon for any violation of competition laws.

Physical retailers claim both the online retailers are flouting India’s foreign direct investment rules as they continue to sell products on discounts and forge an exclusive partnership with sellers.

This report was first published on KrAsia.