Amazon proposes offline route to strengthen presence in India, says GlobalData

Following the recent news that global e-commerce giant Amazon plans to open 100 offline kiosks across India by the end of 2019,

Sumit Chopra, Consumer Research Director at GlobalData, offers his view:

“Seven years after expanding into India, Amazon has realized the immense potential of the Indian offline retail market. Even though the number of Internet users surpassed the half a billion mark in India in 2018, it is still pegged at one-third of the total population. On the other hand, digital transactions still lag behind cash transactions by a huge margin in the country. Against this backdrop, the company sensed a big opportunity where it can use offline channel to reach out and directly establish interaction with consumers across India.

“Amazon has been looking to expand and strengthen its offline presence in India with a shop-centric and customer-centric model to give customers a first-hand experience of its devices such as the Kindle ebook reader, Echo and Fire TV dongle. Two years ago, Amazon had first ventured into offline play with ‘Amazon Kiosks’ in the South Indian city of Bengaluru. Later, it opened four more kiosks – one in Ahmedabad, two in Bengaluru and one in Mumbai.

“The expansion comes at a time where other giants like Google and Myntra – the online fashion arm of Flipkart – are scaling up their presence in the offline sector. With its calculative move, Amazon will be able to leverage the advantage of the FDI regulations along with maximum visibility towards the consumers, especially in the tier 2 and tier 3 cities. By providing the prospective buyers an idea of the hardware products, Amazon can boost sales by gaining traction towards the section of the population which still believes in physically seeing a product before actually purchasing it.”

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