Amazon's Indian touch: Jeff Bezos.

Amazon's Indian touch: Jeff Bezos.

Amazon aims to pacify small traders with $1billion SMB bet

Amazon will establish 'Digital Haats' in 100 cities and villages to help businesses

Agency Report | New Delhi | 15 January, 2020 | 11:20 PM

Amazon's $1 billion commitment to empowering small and medium businesses (SMBs) in India is Jeff Bezos' attempt to change the e-commerce giant's perception among small businesses which are in a retaliatory mode.

Bezos announced that the e-commerce major, through its global footprint, will help SMBs export products worth $10 billion by 2025.

This move is seen as a measure to calm the growing unrest and protests going on under the aegis of the Confederation of All India Traders (CAIT).

“Amazon wants to make sure that the current perception of the company among the small businesses go away, else this will further call for strict scrutiny from the regulators and protests from small traders,” Satish Meena, Senior Forecast Analyst with Forrester, said.

Over the next five years, Amazon will invest $1 billion to digitise micro and small businesses in cities, towns and villages across India, helping them reach more customers than ever before, announced Bezos.

According to Meena, this is in line with what Amazon is planning to do in India for the next few years.

“They need partnerships with SMBs for products to cater not only to the Indian customers but also to customers outside the country,” he said.

Amazon said it would establish ‘Digital Haats’ in 100 cities and villages to help businesses integrate into the digital economy.

According to Prabhu Ram, Head, Industry Intelligence Group (IIG), CMR, SMBs in India account for 45 per cent of industrial output, creating employment for 60 million Indians and roughly 1.3 million jobs annually.

“The SMBs, however, are constrained by multiple challenges, including access to skills, talent, finance, and most importantly, digital outreach,” Ram said.

“This is where SMB-centric initiatives, such as Amazon’s commitment, are a welcome initiative to digitally support SMBs, enabling them to gain knowledge, reach their target audience, achieve scale, and while doing so, be able to measure their growth metrics,” Ram said.

In the end, added Meena, SMBs in India also need handholding in product development, capital investment and access to market.

Speaking at the Amazon ‘Smbhav’ event here, Bezos said that Amazon would support SMBs to export their products. Bezos announced that the e-commerce major, through its global footprint, will help SMBs export products worth $10 billion by 2025.

“We’re committed to being a long-term partner of India. And actions speak louder than words,” said Bezos.

“Over the next five years, Amazon will invest an incremental $1 billion to digitise micro and small businesses in cities, towns, and villages across India, helping them reach more customers than ever before. This initiative will use Amazon’s global footprint to create $10 billion in India exports by 2025.”

“We are going to use our global footprint to export 10 billion dollars of Make-in-India goods by 2025,” he said.

Bezos said that the rationale behind the support is that the business with SMBs in the country is doing well.

“Because it’s working, and when it’s working, you should double down on it.”

On the prospects of the Indian market and entrepreneurs, Bezos on Wednesday said that the 21st century will be the century of India.

“I predict that 21st century is going to be the Indian century,” he said adding that apart from the dynamism it has India is a democracy which is a major characteristic of the country.

He also observed that in terms of alliances, the 21st century would be about bilateral relations between the US and India.

The Amazon CEO’s India visit comes at a crucial time as the Competition Commission of India (CCI) on Monday ordered an enquiry into the business practices of e-commerce majors Amazon and Flipkart.

Also, traders are staging protests across several cities, under the aegis of Confederation of All India Traders (CAIT) protesting against the visit. CAIT has been protesting for the past few months against what it calls “deep” discounts offered by the platforms. (IANS)