E-commerce market hots up: Amazon brings corner shops under its fold

Ties up with over 30,000 local grocers; aims to make up to 100,000 such stores work with itself in some way by the middle of next year

To expand its offline footprint in the country, Amazon has tied up with more than 30,000 local grocers, corner shops, and smaller retailers. The idea is to make them part of its larger retail ecosystem. The number of local shops working with Amazon in one way or another could go up to 100,000 by the middle of next year, it is learnt. 

The move is expected to ensure that even in a small way, every buy from these shops happens via some part of Amazon’s ecosystem. 

While some of these retailers are part of their assisted e-commerce platform, others have given Amazon warehousing space in their shops to be part of its forward logistics. Some others are either using their payments platform for digital transactions or the inventory management services. 

According to experts, Amazon wants to create a growing omni-channel base, which would not only be able to take on the likes of Flipkart (or Walmart) but also Reliance Retail, which has a massive offline base and about to enter the online marketplace space in a big way. 

Amazon India started its assisted e-commerce initiative in 2015 in partnership with small grocery store owners under Project Udaan, which has now been renamed Amazon Easy. 

The company has taken the number of stores to 14,000-plus across 21 states, with large network partners such as Storeking, Vakrangee to smaller partners such as Linq, Indiabuys as well as individual shop owners.

A logo and branding for Amazon Easy have been created to help customers identify the stores and understand the offering. Even the brand name Easy was coined especially keeping in mind small towns. 

“We equip these offline stores with training materials that include skills like searching, browsing, and navigation on Amazon.in, helping customers set up Amazon accounts, check-outs, payments, answering status and delivery queries, and refunds and returns if required. 

Amazon Easy is not only helping more people join the digital ecosystem but also opening up self-employment and other job opportunities for semi-skilled and partially-skilled people etc,” Kishore Thota, director, customer experience and marketing, Amazon India, recently said.

Amazon has also taken up significant warehousing area in 17,500 stores across 225 cities under its  ‘I have space’ programme. The firm takes up space in stores for logistics hubs to help it in fast delivery. “All these stores are again going to provide a front for Amazon’s omni-channel push. Its vernacular initiative bundled with this would help the company reach out to the largest possible customer base that too in smaller towns,” said a source close to the firm.

To increase its presence amongst customers going to large format retail store, Amazon is on the final stages to pick 49 per cent stake in Aditya Birla Group’s food and grocery chain business for close to $550 million, a deal which might be finalised over the next two weeks. It is also planning to pick a minority stake in Kishore Biyani’s Future Group for around $600 million.   

According to sources close to the company, by next year Amazon plans to cater to all retail needs of customers either through its e-commerce platform or would be indirectly involved via its investment, stake buys or due to partnerships. 

“With these two deals itself they would be able to own a chunk of retail business in the country. Even if it is a stake buy via its investment arm or Amazon investing in Future, end of the day it would be an affiliate of Amazon that a customer is buying from. They would be consolidating as well as gaining a chunk of the market share,” said a source close to Amazon.

While More has around 580 stores in India, the Future group has more than 2,000 stores in different formats including Big Bazaar, Easyday and Nilgiris, among others. “While it might sound like just an investment, Amazon would be able to gain access to millions of customers of these two players. They would be able to get on-ground experience of buying patterns in the country,” the source said.