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Amazon has increased the price of Amazon Japan’s Prime membership.
Ecommerce giant takes steps to bridge the online to offline gap in India.
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.
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.
Keep up-to-date with the latest retail developments from Asia.
Vietnamese merchants to get on board Amazon’s Global Selling network.
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.
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.
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.
Competition Commission approves sale of Aditya Birla’s More supermarket chain to Amazon.
The Competition Commission of India has recently allowed the sale of More supermarket chain to proceed. The chain will be sold to Witzig Advisory Services, a joint partnership between Amazon and Samara Capital, for more than INR42bn. Samara Capital, an Indian investment fund, will own 51% of the chain, while Amazon will have a 49% stake of the business.
Although the CCI has approved the deal, Witzig must still ensure that it is compliant to the new Foreign Domestic Investment rules that were announced last month. It remains unclear how Amazon plans to integrate More’s operations into the Amazon India platform.
A possibility is for Amazon to treat the acquisition purely as an investment and to maintain separate operations. If this is chosen, the integration with More supermarket can take place if there are future policy revisions.
The retailer currently has more than 530 supermarkets and 20 hypermarkets spread across India.
Find out more information about More supermarkets here.
Regulatory guidelines may have significant impact for ecommerce.
In a move aimed at promoting fair trade in India, the government has announced a series of regulations for the ecommerce industry. From 1 February 2019, online marketplaces will not be allowed to list exclusive products on its platform. Previously, manufacturers and suppliers would work with Amazon or Flipkart exclusively to launch new products or promotions. This was especially common for smartphones and other consumer electronic items.
The new ruling states that online retailers must provide equal trading terms for all of its vendors and suppliers. Manufacturers and suppliers are now allowed to have a maximum of 25% of total online sales revenue from a single marketplace.
Another new regulation that will be introduced prevents foreign companies from selling its own products directly to shoppers. An example of a product to be impacted by this regulation would be Amazon’s Echo speaker. Under the new rules, this product will not be allowed for sale in the Amazon India site
Deep discounts offered by online retailers have badly affected many smaller businesses, making it difficult for them to compete effectively. By removing these entry barriers, the government hopes to encourage the growth of local mid and small enterprises.
Find out more information about the Indian market here.
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