E-commerce in India is growing at a rapid pace owing to the convenience it offers. Sellers sitting in a smaller towns are now able to sell their products across India and globally through these platforms.
Amazon India on April 30 said that it saw 56 percent rise in the number of local merchants selling to international markets through its global sellers programme. The export sales from India have hit $1 billion, the company said during a media interaction.
With over 140 million products on its platform and 50,000 sellers, mostly from small and medium sized vendors since the launch of the programme in 2015, the company is confident of reaching the $5 billion by 2023.
Gopal Pillai, Vice President of seller services, said that more than 80 percent of the company’s current export vendors were from small towns and cities.
Amazon India head Amit Agarwal on April 30 told media persons that the platform gives sellers from across the country, including tier II and III cities, and access to the global market for their products. Agarwal pointed out that small sellers from smaller towns such as Namakkal, Tamil Nadu were able to sell their product in Amazon and increase their reach. He gave an example of the tea brand Vadham that Opera Winfrey has said she loves.
As rosy as its sounds, the story is far from that for sellers, say trader bodies and other media reports. Even in India, which is one of the key markets for the company, sellers have not been a happy lot and have raised issues in the past.
The e-commerce giant was criticised by associations such as the Confederation of All India Traders (CAIT), an association for small traders and Swadeshi Jagaran Manch, an RSS affiliate organisation. The backlash is primarily for promoting the fulfillment platform Cloudtail and Appario, which it partially owns through a joint venture and is know for deep discounting. A few have claimed that they do not provide its sellers a level playing field.
As per industry estimates, Cloudtail and Appario make nearly 50 percent of the daily volumes on the site. However the company has made some restructuring by selling its stake in Cloudtail over a revision of Foreign Direct Investment (FDI) rules. Some reports said that the company is doing similar restructuring in Appario as well.
Though Flipkart is the market leader with revenues up to $3.8 billion as opposed to Amazon India’s $3.2 billion, the latter is catching up faster.
Praveen Khandewal, General Secretary, CAIT, said, the platform lacks transparency. “So far the company has not divulged their business model in India like the business figures here. But at the global level they are doing it at a large scale.”
While selling products that are made in India globally is good, Khandelwal pointed out that there is no regulation in place to scrutinise what kind of products they are promoting in the global sellers initiative. Responding to this reporter’s question of sellers’ claim, Agarwal, Amazon India head, did not respond directly. He said that while there will always be a section of sellers who will complain, there are many others who have been benefitted and that is where the focus should be.
at a recent seller conference held in India, Pillai, Amazon India’s VP for seller services further added that the company has not gotten any complaints from sellers so far.
Despite this assurance, there have been concerns from sellers globally . Roomy Khan in her article in Forbes, said, “While the growing Amazon Marketplace is attracting new sellers every day, it is also creating an unruly, frenzied out of control e-commerce environment. The bigger the marketplace gets, the harder it is to monitor the sellers and the products they sell.”
Khan argues that while the opportunities are huge, “Amazon has become a cesspool of unvetted merchants and unqualified products from all over the world,” with fake products and paid reviews leading consumers astray.
Though there are guidelines in place, Khan said that it is unclear whether Amazon has any mechanism to enforce, verify or audit compliance with the published guidelines. “The company mostly relies on the sellers to comply with the rules and has a laissez-faire approach towards enlisting new sellers,” it added.
Another issue is the profitability for sellers. While Amazon provides a platform to sell products, Spencer Soper from Bloomberg said in a media report that Amazon has evolved from being a partner to competitor. That means that sellers have to shell out more to sell their products.
Citing the story of one merchant Jason Boyce, Soper explains how Amazon is making money at this merchant’s expense. The company now makes products similar to that his but is placed prominently and is less expensive.―Money Control