Amazon AMZN continues to prosper in the e-commerce market of India on the back of growing export volume of the country’s small and medium sellers to global markets.Notably, the volume has now exceeded the mark of $2 billion, which is not only a huge achievement for the company but also beneficial to sellers.

This can be attributed to aggressive retail strategies, robust distribution network, deepening focus toward digitization and most importantly solid momentum across small and medium businesses.

Further, its Global Selling programme, which was launched in 2015, has contributed significantly to export volumes. The programme has reportedly exported products of nearly 60,000 merchants from India via 15 Amazon websites.

All these have not only helped Amazon in expanding business in India but also accelerated sales growth of the country’s small and medium businesses by bringing them online.

We note that the United States emerged as the largest market for these sellers, who experienced robust sales during Prime Day and holiday season events such as Black Friday and Cyber Monday.

Amazon’s Focus on Small & Medium Sellers

The e-commerce giant’s strengthening focus on small and medium businesses in India is likely to continue aiding its presence in the country’s online retail market, which holds promise.

Per the latest data from India Brand Equity Foundation, the e-commerce market of India is expected to generate revenues worth $120 billion in 2020. Further, the market is likely to hit $$84 billion by 2021 and reach $200 billion by 2026.

According to Bain & Company, gross merchandise volume (GMV) in online retail market of India is anticipated to see a CAGR of 30% in the next five years. By 2025, GMV is likely to lie between $100 billion and $120 billion. Also, online shoppers are expected between 300 million and 350 billion over the same time frame.

We believe Amazon is well poised to capitalise on these growth prospects with the expanding small and medium seller base on it se-commerce platform in India.

Notably, the company announced an investment of $1 billion in India at the Smbhav summit in New Delhi in the beginning of the year.

With $1 billion investment, the e-commerce giant aims at building digital centers in 100 cities and villages in India. We believe the proposed digital centers are likely to help over 10 million small and medium businesses to come online.Further, the investment is focused on making exports of products made in India worth $10 billion by 2025.

This remains the company’s noteworthy step.
   
Amazon’s Efforts & Intensifying Competition in India

Apart from the commitment of $1 billion investment, the company has made other notable efforts that will benefit its e-commerce business in India.

The company is reportedly looking to venture into the multi-billion dollar alcohol delivery market in the country. The retail giant has already secured a clearance to carry out online retail of liquor trade.

Further, Amazon’s long-term agreement with Future Retail that will authorize it as the official online sales channel for Future’s retail stores remains a major positive.

All these endeavors are likely to bolster its competitive strength in the e-commerce market in India where the battle is intensifying with eBay EBAY and Walmart WMT-owned Flipkart in the fray.

We note that Amazon and Flipkart are embroiled in a neck and neck competition.

Further, Facebook’s FB growing interest in this particular market is noteworthy. It has recently announced an investment of $5.7 billion to buy a 10% stake in Jio Platforms. The deal is likely to bring together Facebook’s WhatsApp with JioMart — a joint venture between Jio and Reliance Retail (nation’s largest retail chain) — to enable people to connect with businesses.

Nevertheless, Amazon’s investment spree in India is likely to strengthen its position in the online retail market of the country.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank(Strong Buy) stocks here.

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