GST rollout, seasonal sales help Amazon grow seller base by over 130,000

Online retail giant Amazon says it has been able to grow the base of sellers on its platform by a little over 130,000 in the past one year, thanks to the success of its seasonal sales and roll-out of the goods and services tax (GST).

Amazon’s seller base in India today stands at 285,000, up from 150,000 in January last year. The company says the virtuous cycle of an increasing customer base bringing more sellers online and, in turn, a growing inventory helping customers shop for more products is kicking off.

“We’ve been adding around 3,000 sellers a week on average since June 2017. Some of it was driven by Diwali and the sale event, while some of it is just the continued traction, driven by the success of Amazon’s marketplace,” says Gopal Pillai, director and general manager for seller services at Amazon India.

Since July 1, when the new tax regime of GST was rolled out in India, Amazon says it saw a marked uptick in sellers signing up on its platform. In under six months, the company says it signed up 85,000 sellers, which is its fastest-ever growth, in terms of adding new supply.

Sellers who were previously not compliant with Amazon’s service policies were forced to become compliant with GST starting July 1, probably opening up a new avenue for them to sell products. The company said it became compliant with GST at 10 am on the day of the roll-out and thanks to months of preparation, did not witness any drop-offs.

“We were able to successfully transition to the GST regime. What we saw was the seller additions to the marketplace increased after GST, which was sort of a positive surprise for us. We thought there would be some disturbance in business,” added Pillai.

Apart from the GST, Pillai says that the success sellers saw during the Diwali period has encouraged more of them to sign up for selling on Amazon. Sales on Amazon grew by 300 per cent for many sellers during the five-daylong sale period, with sellers clocking gross merchandise value of over Rs 1 million seeing sales growth of as much as 150 per cent, while those grossing over Rs 100 million seeing growth of over 50 per cent on average.

Sales have become a mainstay for Amazon to not only get more customers to shop on its platform, but also get more sellers onboard. The need to get more sellers the company says brings more variety to the inventory on Amazon’s platform, in turn causing shoppers to buy more products online.

As much of the top management at Amazon believes, Pillai, too, says India’s e-commerce sellers are still on Day One of the country’s online selling story. He says that in a developed market such as the US, Amazon added 300,000 sellers to its platform last year, and the ticket sizes of those sellers is in the hundreds of thousands of dollars.

“When you have great customer experience, it drives traffic and where there is more traffic, sellers want to be there. It’s true even in the offline world, and this helps sellers build lower cost structures, and when that happens they can offer products at lower prices. Particular when there is competition, we see best-in-class products being sold at the best prices,” says Pillai.