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Amazon and Life supermarket are partnering to sell fresh foods online in parts of Tokyo starting later this year.

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Amazon is reportedly shutting down its domestic ecommerce marketplace business in China by mid-July. It will focus on cross-border business.

A challenging ecommerce market

Amazon has been facing fierce competition from Chinese ecommerce companies. Alibaba and JD.com can deliver a larger range of products to Chinese customers faster with their scale and infrastructure. There are also smaller players like Pinduoduo, which are growing fast with their price advantage.

At the start of Amazon’s journey into China, it had the advantage of good reputation and offering authentic products, however, as the Chinese ecommerce companies continue to build their strengths and guarantee product authenticity, the advantage has diminished.

Focusing on cross-border ecommerce

As the Chinese consumers increasingly demand good quality products around the world, cross-boarder ecommerce has been on the rise. Amazon is better positioned in this area benefiting from its global reach. It is also helping Chinese merchants to sell to overseas consumers via its Amazon Global Selling service. It has set up Global Selling parks in Hangzhou, Xiamen and Ningbo.

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Amazon has increased the price of Amazon Japan’s Prime membership.

Fee flat for 11 years

Amazon Prime was launched in Japan 11 years ago and the 3,900 yen cost has remained unchanged up until now. Amazon has increased the cost to 4,900 yen (US$44), a 26% increase. The company cited the growing number of services available to members. In recent years, Amazon has improved its offering in Japan, including adding services such as Amazon Fresh, Prime Wardrobe, music and video. Whilst the cost of Prime membership has increased, the price is still lower in comparison to the US, where the annual cost is US$119.

Profitability

Amazon’s annual report shows that the retailer’s international business saw a loss of US$2.1bn in 2018. The move by Amazon to increase its Prime subscription fee in Japan highlights the company is increasingly prioritising profitability. In April 2018, Amazon increased the Prime membership fee in the US by 20%. In addition to increasing the cost of Prime, Amazon is also looking to improve profitability through the expansion of private label; creating a more efficient supply chain, for example, working with vendors to develop Frustration Free Packaging (FPP) and growing its Amazon Advertising business.

Ecommerce giant takes steps to bridge the online to offline gap in India.

100 kiosks to be opened across the country

With only one-third of the population with access to the internet, Amazon India is taking steps to strengthen its physical presence in the country. The ecommerce giant has announced plans to open more than 100 small kiosks by the end of this year.  

Needing less than 10 sq m, these kiosks will be located within shopping malls and sell a range of locally produced items. Amazon’s own products, like the Kindle ebook reader and the Echo speaker, will also be available at these kiosks.

Amazon first trialled these kiosks in 2017, in Bengaluru. It has since opened four more stores and learnings from these trials have shown there is sufficient demand to support further expansion.

Growing acceptance for Amazon Pay

The retailer also announced plans to introduce Amazon Pay, its online payments platform, into several neighbourhood stores. A scan and pay system is being developed specially for these kirana stores.

Already, shoppers can make use of Amazon Pay in the Shoppers Stop department store as well as the chain of More supermarkets. As the retailer already owns a stake in these stores, it has been considerably easier to introduce Amazon Pay into these stores.

However, Amazon Pay will face stiff competition from the more established payment platforms of Paytm, PhonePe and Google Pay.

 

Find out more information about Amazon here.

 

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Vietnamese merchants to get on board Amazon’s Global Selling network.

Access to ecommerce base

Merchants in Vietnam will be able to sell to wholesale buyers in US, Japan and Europe. This is Amazon’s first ecommerce operation in the country. Amazon has a partnership with VECOM, Vietnam E-commerce Association, which brings together a consortium of local online sellers.

Increasing reach for local sellers

Vietnam is a key manufacturing hub and one of the top exporters in the world. The international market offers opportunities for local manufacturers as the Vietnamese market is still small.

“Vietnam has more than 700,000 businesses, 98 per cent of which are SMEs. Therefore, in addition to traditional trade promotion initiatives, developing e-commerce is critical,” said Vu Ba Phu, head of the ministry’s trade promotion agency.

Grocery ecommerce still in early development in Vietnam

There are many local ecommerce players, but grocery is not a key focus. We believe it is unlikely for Amazon to enter grocery retail in Vietnam in the near future. Local grocery retailers like Saigon Co.op and VinMart have just launched their ecommerce site in the last couple of years. Tiki.vn, which started in 2010 as a bookseller, has started selling dry groceries but no firm plans to enter the fresh category yet.

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