Amazon India’s future plan: How the e-commerce giant deals with competition – BusinessToday

When Reliance outsmarted Amazon in 2022 by signing new leases with the owners of over 800 Future Retail stores, it dealt a blow to the US giant’s offline plans in India. Today, after several twists and court battles, what Amazon thought would be a straight takeover of Future Retail through its 49% stake in Future Coupons appears uncertain. The offline track would give Amazon India an important growth engine in a complex and dynamic market. Despite this setback, Amazon India is busy doubling down on its growth plans. In June last year, it pledged to invest another $15 billion by 2030, taking its total investment in India to a whopping $26 billion. This is ample proof of the aggressive growth that the Jeff Bezos-founded company is seeing in the Indian market. In the 10 years since entering India in 2013, Amazon has spread its wings across businesses and platforms. Currently, its fulfillment centers are located in 15 states and offer more than 43 million cubic feet of warehouse space. There are more than 1.4 million sellers on the platform, and Amazon Pay, its payment offering, has more than 80 million users.

In our cover story, Krishna Gopalan takes a closer look at where Amazon is heading after more than a decade in the country. True, there is also serious competition in the form of Walmart-owned Flipkart, which is estimated to overtake Amazon in terms of gross merchandise value (GMV), a key metric in e-commerce. In FY23, Flipkart’s GMV (excluding its fashion arm Myntra) was $20 billion compared to Amazon India’s $18 billion. However, Amazon India country director Manish Tiwary says the history of e-commerce in India is still being written and companies have “barely scratched the surface”. Tiwary is right: based on Open Network for Digital Commerce (ONDC) estimates, Indian e-commerce penetration is still just 4.3% compared to 25% in China and 23% in the UK. That’s where there’s a lot of room to grow.

Talking about technology, Surabhi gives details on current trends as the government prepares to introduce the Digital Competition Act to rein in global and Indian tech giants and ensure a level playing field. With several countries considering legislation to ensure fair competition in digital markets and Big Tech companies under investigation for alleged anti-competitive practices, Indian policymakers will need to strike the right balance between ensuring fair play, maintaining the sanctity of the use of personal data and ensuring market freedom. There is a lively debate on this topic in India, the world’s second-largest online market. In conversations with policymakers, many tech giants have said they do not support ex ante regulation. All eyes are now on the final shape and form that digital competition law will take. This will be a key element of the legislation.