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Amazon makes its presence felt in India’s offline retail market

Amazon the world’s largest e-commerce firm, is making its presence felt in India’s $60 billion organized retail market, much like it has been doing in the US. Through a series of acquisitions and tie-ups, Amazon has started making inroads into well-known consumer goods and retail brands in India to bring its brands to people who are not yet part of the e-commerce market. At present e-commerce penetration is at 2 per cent of all retail sales.

In September, Amazon announced it was buying a 5 per cent stake in departmental store chain Shoppers Stop for Rs 179.25 crore,. Amazon plans to use this partnership to set up “Amazon Experience Centres” where it can showcase its brands—mostly in fashion and accessories.

Amazon now has access to this network. The company’s private-labels include AmazonBasics, under which it sells electronic and mobile accessories, luggage, stationery and dining and kitchen products. This fits with Shoppers Stop’s merchandise mix—35.3 per cent of its sales for the quarter ended 30 June came from the non-apparel segment which largely consists of home and electronic items, and personal accessories.

Meanwhile, the company has partnered consumer goods firm Dabur India to set up an e-commerce portal to sell Ayurvedic products and medicines in India. Amazon India declined to comment on its plans for the partnership with Dabur. While Amazon manages the logistics of e-commerce in Ayurveda, it also gains access to brands and consumers in a fast-growing space. Market research firm Nielsen India. Amazon’s strategy to penetrate India’s retail market also comes under a regulatory regime that does not allow foreign direct investment in multi-brand physical retail or in inventory-led e-commerce firms.