Amazon to extend online B2B marketplace to Tier-2 cities

Currently, company carrying out pilot for its online wholesale business in Bengaluru

US-based e-commerce giant Amazon is set to extend its online business-to-business (B2B) model to select cities in Karnataka before taking it national.

Amazon’s Indian subsidiary Amazon Wholesale India launched its pilot project in Bengaluru in April. Target customers are small and medium enterprises, hospitals, hotels, private companies and banks. Amazon has in two months reached several thousand businesses in Bengaluru, which have started buying on its wholesale e-commerce site, amazonbusiness.in.

Unlike in the US, where Amazon marketplace includes other sellers, in India it is a wholesale business on its own.

“We buy over 10,000 products from more than 100 Indian manufacturers directly and sell to small businesses. The sale happens only to registered members who have either VAT or CST registration, offices, private companies, hospitals and banks,” Kaveesh Chawla, head of Amazon Wholesale India, told Business Standard.

Amazon sells products in health and personal care, office supplies, kitchen and dining, food and beverages, bed, bath and furnishing, and cleaning tools and supplies. It is planning to launch professional medical supplies.

The company has a separate 30,000 sq ft warehouse in the Bommasandra industrial area of Bengaluru  where it receives products directly from manufacturers and ships them to customers within two days after an order is placed online. Amazon maintains a separate centre for its B2C business at Hoskote on the outskirts of Bengaluru.

The company is assessing extending the B2B marketplace to cities like Mangaluru, Belagavi, Hubballi and Dharwad. “We want to launch our pilot project in Tier II cities before we go pan-India. We will cater to these cities from our centre in Bengaluru,” Chawla said, adding sales in these cities would begin by the end of this year.

“There are 46 million SMEs in India we want to reach out to. Eventually, we will expand pan-India. But there is no timeline for that,” Chawla said. “We are focused on transforming the way Indian SMEs buy and sell their products. We are going to allow a whole lot of SMEs to sell their products in different parts of the country through our B2B online marketplace,” he added.

Amazon is also buying products from large manufacturers like 3M India, Himalaya, Britannia and Unibic. The company would launch credit and debit card-based payment solutions and cash on delivery, Chawla said.