After FDI prick, Amazon back in the ring with record number of merchants

Amazon India seems to be back on track after adding over 50,000 sellers since January. Their numbers are at an all-time high, at 450,000 merchants. This is after making drastic changes in its business model and going through a rapid transition to be compliant with foreign direct investment (FDI) norms in the e-commerce sector

E-commerce firms had to change the way they functioned after the government enforced new FDI norms in the sector on February 1. According to Amazon India, the company is compliant with all FDI norms in the e-commerce sector. For the time being, it has even stopped a few vendors, including Shoppers Stop, from selling on the platform as it has a 5 per cent stake in the retail major.

The company, however, claims they have not seen any change in the growth rate of sellers. 

“It has not changed at all. We are seeing similar growth rates. Seller interest has been phenomenal. As far as being compliant with norms goes, we have always been compliant. The number of sellers has been steadily increasing. Till December last year, we had around 400,000 sellers, now the number has jumped to over 450,000. From a run-rate perspective, we are not seeing any changes at all,” said Gopal Pillai, director and general manager, seller services at Amazon India.

In the case of Amazon India, it had to completely stop featuring Cloudtail and Appario. Delhi-based Appario Retail was a joint venture between Amazon India and Ashok Patni, co-founder of Patni Computer Systems. Cloudtail was a JV between Amazon.com. and Narayana Murthy's family office Catamaran Ventures. However, after February 1, Amazon reduced its stake in both firms to 24 per cent. This helped it become compliant with the FDI norms. The stake is owned by the non-Indian arm of the retailer, Amazon Asia-Pacific Resources.

"From our perspective, we have no equity partnership in any seller company in our marketplace. Also, no seller buys more than 25 per cent from the wholesale business. We are 100 percent compliant. Shoppers Stop is not back on the platform as a seller as of now," Pillai said. Last year, the company invested over $950 million into the country. Most of the money has been spent on manpower, warehousing, infrastructure development as well as expanding its footprint in the country. Amazon India now delivers to almost all the pin codes in the country. It has around 70 warehouses throughout the country and employees close to 45,000 direct and indirect employees.

The company has started a string of initiatives including giving regional language support. It has launched services in Hindi, English, Kannada, Tamil, and Telugu. It now provides digital assistance offered by seller support teams in regional languages of their choice.

It has also started a Service Provider Network, which helps sellers launch, manage, and grow their business on the Amazon.in marketplace. It is a scalable network of third party service providers empanelled by Amazon, which includes experts in digital imaging, cataloging, transportation, order management, and customer service. The company has expanded its lending services for small sellers.