The wholesale portal could be launched early next year, according to two people with knowledge of the plans.
"The (Amazon) India team has been working on this top secret project for the past few months. Talks with potential suppliers and the hiring process have begun," said one of the sources. "It will be similar to what
The initiative could be led by Samir Kumar, who is currently director of category management, said a third source. The wholesale team will report to
An Amazon India spokeswoman said: "As a policy, we do not comment on anything that we may or may not do in the future." Since debuting its online retail business in India last year, Amazon has grown rapidly.
Amazon has grown rapidly and aggressively in India, challenging Flipkart for market leadership in the country. Illustrating the scale of its ambition, founder
The India wholesale portal will be similar to AmazonSupply, its online site in the US focused on business consumers.The India platform will also target small and medium enterprises. However, it is not clear yet whether the company will offer all categories of products under its wholesale platform. For instance, AmazonSupply does not sell apparel and other soft lines such as furnishings. AmazonSupply was launched in 2012 and is still in ‘beta’, or test mode. The site, which does not have a minimum order size, sells products ranging from office supplies to electrical equipment.
Since June last year, Amazon in India has set up a network of seven warehouses across the country and has over 8,500 merchants selling products in over 28 categories on its platform. The company is estimated to be on track to reach $1 billion (Rs 6,000 crore) in sales this fiscal. One of the factors influencing decision-making at Amazon is the Chinese ecommerce group Alibaba.
Sources who briefed ET on Amazon’s wholesale plans said the firm wants to quickly establish wholesale operations in India before Alibaba pays serious attention to this market. Alibaba has set up offices in India but its platform is primarily focused on connecting small and medium enterprises in India to global buyers, and not on domestic sales.
Alibaba has taken the fight to Amazon in its home market by launching a portal in the US before its public offer, which could mop up over $21 billion (Rs 1.2 lakh crore). In China, Alibaba’s success has been built on the back of business-to-business transactions.
In India, too, the online channel is expected to be a disruptive force in wholesale. "The online channel can bring in efficiency," said Singhal of Technopak. "There are millions of small retailers who buy from physical wholesalers, but the system is very inefficient."
Others too have been drawn in by this opportunity. US retail giant Walmart has estimated that India’s wholesale market will grow to $700 billion (Rs 42.5 lakh crore) by 2020 from the current $300 billion (over Rs 18 lakh crore). Earlier this year, it launched a business-focused site bestpricewholesale.co.in for its wholesale club members in Lucknow and Hyderabad. Technopak has estimated that the retail market in India is at $525 billion (Rs 32 lakh crore) at present and will double in size by 2020.
German retailer Metro’s India brick-and-mortar wholesale cash & carry business has managed to carve out a space for itself in the decade that it has operated here. In 2013, it had incurred a loss of Rs 272 crore on a turnover of Rs 2,521 crore. The company runs about 15 outlets in India and plans to have 50 wholesale stores in the country by 2020.