Amazon expands its global selling service
E-commerce firm Amazon India is fast expanding its global seller programme that allows its third-party merchants to sell ethnic apparel, home furnishings and other goods to Amazon customers in nine international markets, including the US, UK, Japan and Germany.
Now, more than 6,000 sellers in India use Amazon Global Selling, compared with just 200 sellers in May when the service was launched. At that time, sellers could only sell to Amazon customers in the US and UK. A "significant" number of the 6,000 sellers have signed up for Amazon's logistics service, Fulfilment by Amazon (FBA), said Eric Broussard, global vice-president of global selling at Amazon.com Inc. He declined to disclose the exact number.
Under FBA, Amazon's third-party sellers ship products to the company's warehouse even before customers have ordered them. Signing up for FBA can transform a seller's business as products are often delivered to customers in 2-3 days' time. Even under the global selling programme, Indian sellers who use FBA can get their products delivered as quickly as one or two days to customers in international markets.
"I expect a majority of the sellers to use FBA because the value is unique. Sellers have a choice: each package from India can take a few weeks to get to international markets and that would obvious- ly limit demand. Or, sellers can use (FBA), cut delivery time and the impact on business is very big. And it's a pay-asyou-go model. Sellers don't need to make capital investments (in building support services)," Broussard said.
Since its launch in June 2013, Amazon India has established itself as the biggest threat to local rivals Flipkart and Snapdeal. Until now, Indian firms haven't ventured abroad, primarily because the size of the Indian market is large. E-commerce sales may exceed $50 billion (around Rs.3.2 trillion today) by 2020 from $4.47 billion in 2014, financial services firm UBS said in an April 2015 report.
Because India doesn't allow foreign direct investment in online retail, Amazon works as a marketplace, connecting customers with third-party sellers on its platform. The company has more than 52,000 sellers currently and is adding a few thousand sellers every month. The global selling programme is one of the differentiators in attracting sellers for Amazon, compared with its local rivals, Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd).
Apart from becoming popular with shoppers, these marketplaces also need thousands of sellers who can consistently provide a high quality of products that are packaged well and ensure they are shipped on time. US-based Amazon, the world's largest online retailer, already offers the global selling service to sellers in its international markets. Such cross-border selling accounts for about one-fifth of its overall third-party sales. For instance, sales of China-based merchants to North America increased 1,000% from 2012 to 2015, Amazon said.