Growing beyond years: From 100 to 1.2 mn sellers, Amazon turns 10 in India

Amazon is committed to innovating for customers and enabling small businesses and start-ups to contribute to India’s vision of becoming a $1-trillion digital economy, said a senior executive at the e-commerce giant which completed 10 years in the country on Monday.

“It’s been an incredible journey of making an Amazon in India, for India. We are truly just getting started. With a young and vibrant population, rising income levels, and increasing penetration of the internet and social media, the future is exciting,” said Manish Tiwary, vice-president (V-P) and country manager of Amazon India’s consumer business, in a company blog post.

The company also pledged to digitise 10 million small businesses, enable $20 billion in exports, and create 2 million jobs by 2025.

“We’re happy to be on track to deliver on them,” said the company.

The firm said it has already digitised over 4 million small businesses, enabled over $5 billion in cumulative exports, and created more than 1.1 million direct and indirect jobs.

“Congrats to our India team on the 10th anniversary of Amazon India,” said Amazon Chief Executive Officer Andy Jassy on Twitter on Monday.

“Proud of what you’ve unlocked for customers, small businesses, and entrepreneurs across the country, and excited for all you will invent and deliver in the years ahead,” he added.

Since 2013, when its India e-commerce operations first started, Amazon has invested over $6.5 billion.

Amazon launched its first shopping website in India on June 5, 2013, and only sold books then. It had just about 100 sellers in a small warehouse in Mumbai. The sellers would get their inventory in their vehicles to the warehouse because it didn’t have transportation.

“From that small warehouse, we now have close to 43 million cubic feet of space and 1.2 million sellers,” said Tiwary in an interview recently.

The search for builders in the India team began a few years before the actual launch date for Amazon.in was even decided. They’d grown up in India, understood the country’s unique nuances, knew the Amazon culture well, and were driven by the opportunity to meaningfully impact lives and livelihoods in the country.

“I remember getting an email from Amit Agarwal (senior V-P, India and emerging markets) in 2009 about plans to launch Amazon in India. I knew him as Jeff Bezos’ technical advisor at the time but had never met him. The idea of building an Amazon for India sounded quite exciting,” said Kishore Thota, in a blog post.

He was one of the first hires in the India marketing team and is now the director, shopping experience, India and emerging markets at the company.

“A lot of Amazonians like me came back from Seattle as we were inspired by the idea of digitising India and making a difference to lives in the very country we grew up in,” he added.

When Amazon.in went live on June 5, 2013, common wisdom dictated that Amazon would bring its global playbook to India, tweak it slightly, and make it work. But the Indian marketplace was built differently from the start and was unlike Amazon in other parts of the world.

“I remember going to this popular electronics store in Mumbai to bring them on Amazon.in. We had a long discussion with them about the potential of selling online, but weren't making much headway,” said Amit Agarwal, SVP, India & emerging markets, Amazon.

“Finally, after sitting in the store for over six hours, we managed to convince them to list a few products with us,” he said.

Amazon said colourful Amazon Chai Carts were used to attract sellers. These Chai Carts travelled over 15,000 km and engaged over 10,000 small businesses along the way.

The company said that its easy returns and refunds soon became an industry standard. It also launched an India-specific lite application that allowed customers to shop even on low-cost phones and patchy networks. Then came shopping in their preferred language.

Starting with one fulfillment centre in 2013, the firm built a nationwide infrastructure and tied up with organisations like India Post and the Indian Railways. It also collaborated with kirana stores to create an effective delivery network across the country.

In 2019, Amazon became the first e-commerce company in India to partner Indian Railways for the movement of packages across the country. In 2023, it added Prime Air, a dedicated air cargo service to further boost our logistics network.

“Nobody had the kind of reach that India Post did, but they were set up differently. Back then, they did not carry electronic products,” recalled Abhinav Singh, V-P of operations, at the company. “We went through several months of discussions with them about the possibilities that e-commerce could unlock. Finally, they saw that this was a good move for India.”

Vivek Somareddy, V-P of seller fulfilment, emerging markets and India exports, said the firm created a warehouse-management system that converted seller locations into mini Amazon fulfillment centres.

Somareddy also said the firm launched Local Shops on Amazon in 2020 to bring local retailers online for customers. “We now have over 270,000 local shops across 350 cities selling on Amazon India,” said Somareddy.

In 2016, the firm brought Prime to India enabling customers to get free and fast deliveries and a host of other benefits, including Prime Video. Since 2016, Amazon Pay is also simplifying digital payments for customers and small businesses.

Amazon is in a fierce battle with rivals such as Flipkart, Reliance’s JioMart, and Tata for a big bite of India’s booming e-commerce market, which is expected to touch $350 billion by 2030.

However, Amazon has also been facing various challenges in the country. For instance, trade bodies such as the Confederation of All India Traders and Delhi Vyapar Mahasangh perceive Amazon and Walmart-owned Flipkart as a threat to local retailers and have taken the matter to various courts.

They had alleged preferential treatment to sellers in which Amazon had a stake. Last year the investigative arm of the Competition Commission of India reportedly carried out search-and-seizure operations at multiple premises linked to two sellers of Amazon.com, Inc, in connection with an investigation launched against e-commerce players over preferential treatment.

Since 2020, Amazon has also been fighting a legal battle with Future Retail to stop the Kishore Biyani-led retailer’s $3.4-billion deal with Reliance Industries. Amazon has alleged the deal breached Future’s agreement with the e-commerce firm.

A recent report by US-based researcher Bernstein says that Reliance is best placed to lead India's $150-billion e-commerce market in the long run, ahead of Amazon and Walmart-owned Flipkart due to its extensive retail network, digital capabilities, and Jio mobile services.

There has also been an impact of global macroeconomic uncertainty on the company’s India operations. Amazon is reportedly laying off employees in India across different functions and businesses including human resources, support functions and Amazon Web Services.

The downsizing round is part of the layoffs announcement made in March by Jassy, which was expected to impact 9,000 employees. The cuts are on top of the previously announced layoffs that began in November and extended into January.

Early this year Amazon started notifying its employees affected by its new round of layoffs, as part of its plan to reduce its headcount by around 18,000 people.

Last year in November, Amazon India decided to shut down Amazon Distribution, according to sources. This followed its recent decision to shut down its food delivery and edtech offerings.