If sources are to be believed, Amazon may invest double the amount in its seller infrastructure in India this year. This news came after the latest fund raising by Flipkart and this move is being looked at as a race for dominance in this highly demanding market.
Capital investment is mainly for fulfillment services
Gopal Pillai, General Manager and director at Amazon India told that potential capital would be more concerned towards fulfillment services, Warehousing, in-person support, service provider network, instant registration, seller cafes, and other services.
Well Pillai didn’t talk about budget but it is sure that the investment will be utilized to make Amazon a seller friendly platform, serving a flawless experience to them.
Amazon has added fulfillment centers
Seven latest fulfillment centers have been added to Amazon last year excepting to enhance the facilities for sellers.
Amazon’s biggest rival Flipkart’s strategy
This month, Amazon’s most outstanding opponent Flipkart gained Rs 9,000 crore and utilized it to lift its marketplace which could help it to strengthen it’s position after competitors like Snapdeal are focused on profits in this market.
Company increases the seller commission
Amazon also increased its seller commission along several categories. Amazon is thinking about changing its strategy for seller and that’s why Amazon is about to raise commission charges for third party seller.
Growth of seller network on Amazon India
Indian online merchants are experimenting with numerous platforms before they pick one after a deep filtering out process. That’s why Pillai put his word that,
“As of March, there has been 160% year-on-year growth in the seller network on Amazon India, with more than 1.75 lakh sellers. This has ensured that on an average, there are 1.8 lakh products for sale in the marketplace at any given time, compared with about 15,000-20,000 products in a brick-and-mortar supermarket”.
Company also decreases fees on some others
He also added on the current increment in vendor commissions that it is an occasional and ordinary process and said that, “It is true that we have increased the commissions in some categories, but we have also reduced fees in certain others. We are the most competitive platform and the commission is the same for all sellers”.
One seller should not have more than 25% business
Pillai has also put his concern on the amount of business contribution in marketplace as Amazon is India’s largest seller in cloudtail. He said that every seller is amenable to government rules and he made a statement that.
“We share the sales mix to the sellers. Every seller understands the rules and complies with them”. The government norms stipulate that a single seller should not account for more than 25% of business.
Government initiatives will earn profits
According to him, second and third tier made a contribution of about 65% of wholesome business at Amazon India along with 50% of the sellers. As per him, government initiatives like Digital India, Make in India, and Startup India are supported by marketplace and its primary objective is to enhance the base of sellers in India.