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Amazon halts wholesale distribution in India

Monday 28 November 2022 11:37 CET | News

Amazon has announced the halt of its wholesale distribution business in India, Amazon Distribution, marking the latest in a series of retreats for the retailer in the market.

 

A wholesale ecommerce website available in small neighbourhood stores in Bengaluru, Mysore and Hubli, Amazon Distribution was designed to help kiranas, the neighbourhood stores in India, pharmacies, and department stores with securing inventory from the e-commerce giant. The solution enabled members to purchase thousands of items for resale at any time of the day, at competitive prices and in bulk quantities, enabling various payment options, offering a GST bill for the order and next-day doorstep deliveries, as described on the Amazon Distribution website. 

As per a statement quoted by TechCrunch, a company spokesperson has advised that the company is discontinuing the programmes in a phased manner to take care of current customers and partners. 

India was believed to be one on the key overseas markets for the retailer, with the company having deployed over USD 7 billion in the region in the past decade. Amazon made no comment on as to why it is shutting down its wholesale distribution offering, however the move follows the company’s halting of two other businesses in the country, its food delivery and online learning platform Academy, amid a business global restructuring. 

Amazon has announced the halt of its wholesale distribution business in India, Amazon Distribution, marking the latest in a series of retreats for the retailer in the market.

Amazon and the Indian ecommerce market

India is thought to be one of the world’s last great growth markets. The ecommerce spending in India, the world’s second largest internet market, is believed to double in size by 2025 to more than USD 130 billion. 

With the retailer having deployed more than USD 6.5 billion in its local business in the country, following these series of announcement it is believed that the company is looking to scale down its operations in the South Asian market, with the firm also having seen changes in its executive team, as reported by TechCrunch. 

Furthermore, the company is lagging Walmart’s Flipkart, struggling in having a noticeable impact in smaller India-based cities and towns, as per a Sanford C. Bernstein report. In 2021, the retailer’s gross merchandise value in the country was situated between USD 18-20 billion, as opposed to Flipkart’s USD 23 billion.

Furthermore, the company faces competition from companies of the likes of Reliance Retail, which launched grocery shopping on WhatsApp, and social ecommerce startups Meesho, backed by SofBank, and DealShare, backed by Tiger Global, with the report stating that the retailer has so far offered ‘a weaker proposition in ‘new’ commerce’.


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Keywords: ecommerce, ecommerce platform, merchants, delivery, payment methods, retail
Categories: Payments & Commerce
Companies: Amazon
Countries: India
This article is part of category

Payments & Commerce

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