Amazon.com, Inc. (NASDAQ:AMZN), the biggest and most popular online retailer, is offering some attractive incentives to get the attention of Indian customers; the reason is that Amazon is currently facing a few issues, such as less internet usage, a few logistics issues and payment problems.
Investors of Amazon want the company to go international in order to get more drive growth along with support for its market value of $165 billion. Amit Agarwal, Country Manager and Vice President of Amazon, India is the third largest emerging market for Amazon’s investments and in time will become even more effective; Brazil along with China enjoy the first two spots.
Using a credit card is still not a very popular concept in India not even half of the total 152 million internet users shop online. Lack of interest in online shopping is also due to minor corruption concerns and a complaining government; both these factors have an effect on all businesses. Technopak a retail consultant company believes that by 2021 online sales among Indians will possibly increase to $76 billion, which is over hundred-fold of its 2012’s $600 million. McKinsey consultants believe that in China by 2020 the e-tail sales will go up to $650 billion, which were $200 billion last year.
According to Retail Decisions and comScore data – analysts based in the US – Indian online shoppers spend $24 to $36 on every online transaction on an average, whereas shoppers from the US spend $150 to $160 per transaction. Agarwal advised Jeff Bezos, founder of Amazon that the long term strategy of Amazon will do equally well in India as it has in the US; Amazon had to face losses over the years before becoming strong in the US.
Amazon’s biggest rival is Flipkart that was founded back in 2007 by Amazon’s two former employees. Since July $360 million was raised by Flipkart from investors, such as South Africa’s Naspers Ltd. Flipkart aims to get sales of $1 billion by 2015.
According to Agarwal Amazon is establishing its own network of logistics, which can make an impact when Indian government rules will change and Amazon can sell to the consumers directly. At the moment Indian regulations prevent international e-tailers to make direct sales in India.
With Junglee.com’s launch back in 2012 Amazon entered into India; Junglee.com is a site for price comparison telling consumers what they are ready to get and what they are ready to give. Junglee.com works with vendors that are local and takes items from those who want to sell. At times packing and stickers are not created properly that increases company’s delivery time.
In the premarket, shares of Amazon.com, Inc. (NASDAQ:AMZN) went down by -0.09% ($363.69).