According to an insider at Amazon, Indian businessman has great potential for B2C and B2B businesses around the world and is likely to outperform its B2C business in India. Amit Agarwal, head and concurrent senior vice president at Amazon India, said the lack of competition and high margins make Indian merchants a huge profit for B2C and B2B businesses. Amazon said that in the next 18 months, payment business will become an important part of the business development in India. India's e-commerce retail market is experiencing a slow growth phase, although Amazon India Station insisted that its growth rate is far exceeded the market. In addition, Amazon said its Amazon Fashion development has far exceeded Flipkart Fashion, Myntra and Jabong. Agarwal said: "2017 is the year when the platform grows fastest, the trading volume of Amazon Fashion (excluding Amazon's other affiliates) is the highest, according to IMRB October-November data."
Experts say that Amazon has a first mover advantage over its rivals Flipkart and Alibaba. Flipkart announced the beginning of its entry into the global retail market after its acquisition of eBay India. Flipkar said the move will help its platform sellers to further leverage eBay's global platform. Alibaba operates B2B business in India for nearly ten years.
TCM Sundaram, founder and general manager of IDG Ventures India, said: "Alibaba is selling Chinese products to Indian buyers and there is nothing to stop Alibaba from developing Indian SMEs."
Amazon is preparing for long-term competition with Alibaba. " It is reported that in November, Indian sellers sent more than 1.5 million merchandise to Amazon's warehouses in the United States in response to the peak sales on Black Friday and Cyber Monday. "In recent months, Indian sellers have sold about millions of dollars (merchandise), an increase of more than 100% .I estimate, in the next five years, Indian sellers global business will far exceed their domestic business" Agarwal said .
"An important reason why Indian entrepreneurs are keen on selling products to the global market is that the average pricing of products on the international market is high, which gives Indian sellers a high margin, which is not available in the local Indian market," Agarwal said in an interview.
Several Indian brands are globally distributed: Dabur, Himalaya, Titan, Patanjali, Amul, and Amazon, which Amazon considers to be a good opportunity to promote their Indian presence.
India B2B business potential is greater than B2C?
In addition to the global store launch project, in September 2017, Amazon launched the B2B platform for small and medium-sized businesses in India — Amazon Business, which was launched in July (July) following the introduction of the new GST tax in India.
Amazon has said Amazon Business is a platform exclusively for wholesale retailers. "The introduction of a new GST in India is a great time to build a B2B platform. We did not launch a platform before because Amazon started to lose 2% of its business before the rules were clear (the implementation of the new GST is expected to be for India Bring a harmonious market of national goods and services and form a simplified (tax-friendly) tax administration system, "
Agarwal added." In the longer term, as business grows, the scale of B2B operations in India will be larger than the B2C business and with huge profit margins, this is a fertile ground for reclamation. "
Amazon India Station plans to begin logistics infrastructure in India in response to the massive B2B cargo shipments. In addition, Amazon has also increased its focus on B2B businesses in the global markets such as the United States and the United Kingdom over the past two to three years. In February 2017, Forrester, a U.S. research firm, predicted that the e-commerce retail industry in India will scale to US $ 48 billion by 2020, down more than one-third from its 2016 forecast of US $ 75 billion. The main reason for this decline was that India canceled large amounts currency in November 2016 and introduced some new rules for electricity suppliers, reducing consumer funds and declining purchasing power. But Forrester said India remains the fastest growing e-commerce retail market ahead of South Korea and China.