Amazon has been working to tackle one of the most difficult logistics challenges in the world, rural India. The company is building a logistics network from the ground up, and trying to turn India, a place with little experience with online shopping, into its next success story. Eric Bellman reports in The Wall Street Journal:
Last year India’s rural shoppers accounted for more than $400 billion of retail sales. Investment bank Barclays PLC estimates Amazon in India recorded more than $7 billion in gross merchandise volume, an e-commerce measure of the amount of business transacted, in the fiscal year that ended in March. That’s about 2% of what it records world-wide.
Amazon’s efforts here face direct competition from Walmart Inc. and local startups, who are all trying to capture customers jumping directly to e-commerce thanks to the recent rollout of 4G mobile internet across India. Amazon expects the number of online shoppers in India to triple in the next few years, most of them from rural areas. More than 80% of its new customers this year are from outside India’s biggest cities, it said.
The Seattle giant has modified its app to work with inexpensive smartphones and patchy cellular networks. It has added hundreds of thousands of Indian language descriptions of products and videos for those who can’t read, and it has opened physical Amazon stores to walk people through the process of ordering online. It brought on tens of thousands of local distributors to deliver packages, often by bicycle down dirt roads, where it will accept cash or digital payment on delivery.
Since starting operations in 2013, Amazon has pledged to invest more than $5 billion in India on its warehouses and logistics network, technology, customer and seller recruitment as well as staff and content development for Amazon Prime.
Read more here.
Jeremy Jones, CFA
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