Amazon’s regional language initiative to grow the Indian market

Amazon AMZN is putting its best foot forward to expand its presence in the Indian online retail space, banking on its robust e-commerce platform and aggressive retail strategies.

Amazon recently introduced a version of its online shopping site and mobile app in Hindi – the most widely spoken language in India – to make shopping more convenient.

Moreover, the latest move will enable the company to overcome the language barrier existing in the country. Thanks to the latest solution, Amazon will be able to penetrate villages and small towns where a significant part of India’s population lives.

According to Reuters, this bodes well for its strong focus on serving the country’s next 100 million customers.

All this will help the company quickly establish itself in the Indian e-commerce market, where it already has a significant position. In addition, the company’s presence in the domestic retail space will also be strengthened.

On a price-wise basis, Amazon shares are up 72.1% year-to-date, outpacing the industry’s gain of 35.3%.

India promises

It is worth noting that India is currently witnessing rapid penetration of mobile phone and internet usage.

According to the latest eMarketer data, e-commerce sales in India are expected to reach $72 billion by 2022 from $32.7 billion in 2018.

According to a report by the India Brand Equity Foundation, online shopping in the country is expected to reach $135.8 billion in 2018, up 31% year-on-year.

Moreover, the report suggests that the Indian retail market is expected to reach $1.1 trillion by 2020 from $680 billion in 2017.

We note that Amazon is well positioned to capitalize on this rapidly growing market with its latest local language initiative.

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Amazon in India

Amazon’s continued efforts to strengthen its operations in India will continue to benefit the company in maintaining momentum in the market. Amazon’s e-commerce platform has been very successful in India and will continue to increase its revenue growth.

The company is likely to continue expanding into the country’s e-commerce market, making it the country’s fifth-largest market after the United States, the United Kingdom, Japan and Germany.

Recently, Samara Capital approached Amazon to set up a special purpose vehicle in partnership with Goldman Sachs to acquire More, owned by Aditya Birla Retail. This will increase its share in the Indian grocery retail market.

Moreover, the company has already entered the department store chain market, acquiring a 5% stake in Shoppers Stop last year.

We believe Amazon’s growing presence in the country will help it gain a competitive advantage over Walmart WMT, which owns majority of Flipkart. In particular, this poses a serious threat to Flipkart’s market share.

Moreover, Amazon’s growing investments in India do not bode well for eBay EBAY’s recent plan to relaunch its Indian unit, eBay India.

In terms of local language, neither Flipkart nor its subsidiaries Myntra and Jabong have local language apps yet. In fact, Paytm Mall powered by Snapdeal and Alibaba BABA also does not have a local language version of its online portals.

Meanwhile, apart from the latest Hindi version of Amazon.in, the company is aggressively planning to introduce more local Indian languages on its mobile website and app.

All these efforts by Amazon will continue to increase its market share in India.

Amazon is currently sporting a Zacks Rank of #1 (Strong Buy). You can see complete list of today’s Zacks #1 ranked stocks here.

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