AMAZON PLANS TO CONNECT TEA GROWERS TO BUYERS ABROAD

Focus on bringing speciality producers on its global platform, helping them to package and market; Tea Board says it is all for this

The Indian arm of e-commerce giant is keen to bring small tea growers (STG) into its Global Selling platform.

This follows a staggering 310 per cent growth in Indian exporters using the Amazon Global Fulfillment channel last year, led by home décor, handicrafts, and leather items. Amazon India has been aggressive in trying to get entrepreneurs from tier-2 and tier-3 cities to join its Global Delivery platform. This exposes them to a global market and raises their revenue with foreign exchange earnings. It says a little over 120 million made-in-India products are being offered to Amazon’s worldwide customer base, via Amazon Global, the exporters being a little over 37,000.

The list has big names such as Dabur, Titan, Himalaya, Manyavar, Amul, and Liberty. And, individual enterprises StonKraft, Callista and others. Most of these small sellers are in the business of textiles, leather, tapestry, and handicrafts. Some tea retailers cater primarily to European markets. “Our Global Selling programme has witnessed huge interest from makers of home décor and handicraft items, books, health, and personal care, as well as exporters of tea, rice, and apparel across Assam”, says Abhijit Kamra, head of global selling at Amazon India. Overall selection from Assam, he said, grew from 4,093 products in 2017 to 41,640 in 2018, a rise of over 900 per cent.

Of a little over 100,000 STGs in Assam and the rest of the northeast, around 200 produce organic and handmade exotic teas. These are much sought in the European, Japanese and West Asian markets. However, these producers mostly aren’t able to export directly to buyers in those countries. They, instead, have to sell to exporters from India, at much lower prices.

Theeconomics

Amazon recently conducted a seminar in Guwahati to attract such STGs, evincing interest from the potential sellers. Achyut

Gogoi, a small producer of speciality teas (including the prized White Tea under the Punjoy Organic brand name), for instance, says he is interested in joining Amazon’s Global Delivery platform. Selling directly to buyers in America and Europe via using Amazon’s Global Delivery Centres would, he estimated, fetch at least 40-60 per cent more than what Indian exporters give him.

On an average, normal handmade orthodox and green tea is sold at ~2,500-7,000 a kilo to exporters; White Tea and other specialities fetch ~10,000-15,000 a kg. Exporters make a 20 per cent margin by selling to foreign blenders who re-sell to consumers or retailers. Gogoi expects direct selling to help him bypass the entire process of third-party export. And, eliminate the need of having his own warehouse or office abroad. “However, like any other STG, I also need to figure out how to market the tea and package it to attract attention from foreign buyers,” he says.

According to an Amazon India spokesperson, the firm offers fulfillment services that allow exporters and manufacturers to focus on the product and pricing, offering imaging, and cataloguing support by getting their photo shoots done in line with Amazon standards, at nominal costs.

“Amazon also provides access to third parties that can provide tax guidance services and other export-related modalities. Additionally, Amazon has supporting content on its website on different international tax and customs processes to help exporters clearly understand the processes,” the spokesperson says.

Arun Kumar Ray, deputy chairman at the Tea Board of India, says they are also encouraging growers to actively sell their produce on the e-platform. The Board, he says, is in the preliminary stages of talks with such e-commerce firms.

“The Tea Board can facilitate talks between the growers and such e-commerce platforms. Exporting to foreign countries will generate more revenue for the growers and better the entire ecosystem,” he says.