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- Amazon.com Inc (NASDAQ:AMZN) lagged behind its chief rival Walmart Inc (NYSE:WMT) owned Flipkart in India on several key metrics and struggled to make inroads in smaller Indian cities and towns, TechCrunch reports quoting Sanford C. Bernstein.
- Amazon's 2021 gross merchandise value in the country, where it has deployed over $6.5 billion, stood between $18 billion to $20 billion, lagging Flipkart's $23 billion, the analysts said.
- India is a key overseas market for Amazon. It competes with Mukesh Ambani's Reliance Retail, Flipkart, and social commerce startups SoftBank Corp (OTC:SFTBY) backed Meesho and Tiger Global-backed DealShare.
- Amazon has so far offered "a weaker proposition in 'new' commerce" in the country, the analysts added.
- Reliance Retail launched grocery shopping on Meta Platforms Inc (NASDAQ:META) WhatsApp.
- India's e-commerce spending will likely double to over $130 billion by 2025.
- Amazon's recent spending for growth in India has also made its local division's prospects of turning a profit "elusive," Bernstein added.
- Amazon has struggled to scale volumes in higher-margin categories like fashion and BPC (beauty and personal care). At the same time, the inability to operate a 1P model (inventory-led) has limited the availability of private labels vs. competition, which further pressures margins.
- Amazon's management attrition has also increased recently, potentially signaling difficulties achieving the desired scale," said Bernstein.
- India forbids a single seller from holding more than a 25% share on a foreign-owned online marketplace.
- Further, no e-commerce marketplace platform can mandate a seller/brand to sell exclusively on the forum, the analysts added.
- India has also clamped down on deep discounts.
- Additionally, the Indian central bank's proposed policy could impact Amazon's buy now, pay later offer, Bernstein, noted.
- Price Action: AMZN shares traded higher by 1.09% at $130.13 on the last check Wednesday.
- Photo via Wikimedia Commons
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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