The notorious brand, Amazon.com, which began as an e-book store in 1994, rapidly grew into one of the most iconic e-commerce providers. Founded by Jeff Bezos, Amazon became “the first online retailer to boast one million customers,” according to the Harvard Business Review. While it continued to expand, Amazon.com required financial support to sustain its growth. In 1997, Amazon became a public company, and its expansion continued from there. Now, a 1.31 trillion dollar company, Amazon.com uses its value to aid foreign countries in growing their virtual world. Specifically, Amazon invests money in countries to create job opportunities and promote the world of e-commerce.
With India becoming one of, if not the, largest countries in the world by population, the new technology world is a crucial development. However, 67% of India’s population resides in rural areas of India that are labeled as underdeveloped. Due to this, only 35% of India’s population has a connection to the internet.
Amazon’s Relationship with India
India is full of local street vendors. These vendors could benefit greatly from the e-commerce world as it would create the possibility for their goods to reach a variety of buyers. However, most vendors in India are very small and were steered away from e-commerce as it seemed too complex. In response to these obstacles, in 2013, Amazon’s investment in India produced Amazon India. Within its initial set-up, Bezos invested 5 billion dollars into Amazon India.
Regardless of the creation of Amazon India, many Indians were hesitant to trust the new site. To gain the locals’ trust, Amazon created a program called “Amazon Chai Cart.” Amazon Chai Cart is a mobile tea cart that goes around cities serving tea while teaching small business owners about the e-commerce world. The Chai Cart is reported to have engaged with over 10,000 vendors.
Amazon’s investment in India continued by creating Amazon Tatkal. Amazon advertises this program as “a superfast solution to selling online.” The Amazon Tatkal vans patrol North and South India aiming to engage local vendors and simplify the process of selling online. Specifically, providing tips on registration, advertising, imaging and more skills.
Shipping and Warehouses
Not only has Amazon impacted small businesses by investing in India’s online world, but Amazon adapted its Fulfillment by Amazon (FBA) to India as well. FBA is a centralized shipping platform that Amazon uses to distribute its products. Companies send their product to fulfillment centers and pay a price for the centers to store, pack and ship their product. There are now over 70 fulfillment centers in India.
Keeping Small Businesses Alive
While there are many legitimate concerns about Amazon overpowering small shops, Amazon India has listed many of the “mom-and-pop businesses” in their delivery system to promote their business and simultaneously the small shops as well. This system encourages buyers to go into their local small vendor shop and use the store’s internet connection to peruse through products on Amazon. While this method is not ideal as it does not promote the shop’s products, shops have reported that their sales have gone up regardless. This is likely because by wanting to use the internet, the buyers are forced to go to physical shops where this is the internet and hopefully buy something within the store, too.
On June 24, 2023, Amazon announced that they will increase their investment in India’s online world to $26 billion by 2030. This was decided after Amazon’s CEO Andy Jassy met with India’s Prime Minister Narendra Modi. The two agreed that Amazon’s investment in India will increase job opportunities in India, support local start-up businesses, enable exports and empower small businesses to compete in the global market. Considering this, there is hope for India’s small businesses to flourish and thus its economy as a whole.
– Samsara Shrivastava