Amazon announces programme to help offline stores leverage power of online

Code-named 'Local Shops on Amazon', the programme expected to help the ecommerce major take on rival Flipkart and Reliance's JioMart

Amazon is rolling out a programme that will bring thousands of small shops in India onto its platform to deliver groceries and essentials.

A pilot programme six months ago has brought online 5,000 retailers and shops in more than 100 cities, said the company.

“We are excited about the possibilities opened up by this programme. We intend to take the learnings from months of running this pilot and also its effectiveness during Covid-19, to scale this India-first initiative including shopkeepers and retailers across India,” said Gopal Pillai, VP, Seller Services, Amazon India.

“A lot of offline retailers are sceptical about how the world is going to operate after the Covid restrictions are lifted and it is not that everything is going to be back to normal. This programme can help (offline stores) get good customer reach, while maintaining the social distancing standards.”

 

Amazon’s plan to take this programme pan-India comes at a time when Facebook is investing $5.7 billion for a 9.99 per cent stake in Reliance Jio Platforms. The Mukesh Ambani-led company’s e-commerce venture JioMart is also bringing Kiranas and local shops on its platform and merging online and offline retail.

According to Amazon, this is for the first time for the company anywhere in the world that it will use its technology, training and enablement capabilities to power local shops across India to sell online. Code-named ‘Local Shops on Amazon’, this programme helps customers discover products from local shops in their city, from the convenience of their homes. The programme also aimed at helping shopkeepers to establish a digital presence and enhance their footfalls expanding beyond their normal catchment. During the pilot phase, offline retailers and kirana stores even from smaller towns and cities such as Saharanpur, Faridabad and Kota had joined the programme.

The customers benefit from access to greater selection, faster deliveries, and additional value-added services, and local shops can transform themselves into digital stores. Additionally, shops can sign up for existing programs that help them earn additional income – ‘I Have Space’ to act as delivery and pickup points, and ‘Amazon Easy’ to offer expanded selection to their walk-in customers. Local Shops are required to use the newly launched ‘Amazon Delivery App’ to provide accurate delivery updates to customers and Amazon, and all shipments are tracked on a daily basis on key metrics.

People familiar with Amazon’s business strategy in India are of the opinion that the company is looking at replicating the model of e-commerce giant Alibaba for small enterprises in India. Alibaba operates Hema stores and business-to-business retail platform Ling Shou Tong (LST) in China. The Seattle-headquartered firm is also looking at adopting the model of Canada-based Shopify, which sets up e-commerce websites for small businesses while it also partners with many to handle digital payments and shipping.

During his trip to India earlier this year, Amazon founder and Chief Executive Jeff Bezos had announced that the company planned to invest $1 billion to help bring 10 million traders and MSMEs across India online. The firm also had said it planned to create 1 million jobs in India by 2025 through continued investments in technology, infrastructure, and its logistics network.

Amazon has so far committed $6.5 billion to the India market. It is making these investments not only to tap the e-commerce market in the country, which is expected to touch $200 billion by 2028, but also digitalisation of small businesses including kiranas and in building its grocery and financial services business. Only 7 per cent of the $1.2 trillion retail market is online and Amazon is eyeing the remaining 93 per cent of the industry, according to sources.