Facebook-Jio Eye ‘Kirana’ Commerce But Amazon Has A $1 Bn Plan Too

Amazon announced it has pledged Rs 10 crore to “immediately expand” its pilot project to onboard local stores.

Tech and Auto
3 min read
Amazon announced it has pledged Rs 10 crore to “immediately expand” its pilot project to onboard local stores.

The unassuming neighbourhood grocery store may not be aware but, over the last two days, it has emerged as a prized catch for three of India’s wealthiest digital enterprises.

A day after Facebook acquired a 9.99 percent stake in Reliance Jio’s platforms with the aim of capturing medium and small business onto its digital platform, retail giant Amazon announced it has pledged Rs 10 crore to “immediately expand” its pilot project to onboard local stores.

“Recognising the urgent need during these times, we are pledging INR 10 Crores to immediately expand our pilot to onboard and train any motivated retailer or shopkeeper who is ready to lean forward with us in this exciting journey,” Gopal Pillai, VP, Seller Services, Amazon India, wrote in a company blog.

Facebook, Jio and Amazon are not the only ones betting big on small and medium businesses in India. Back in February 2018, digital wallet company PayTm had announced “a new model of retail, wherein you can walk into brick and mortar stores, scan product QR codes to browse information and make purchases using our app,” as part of its PayTm Mall operations.

The scale of investments illustrates the potential of the ‘kiraana commerce’. While Facebook has invested $5.7 billion (₹ 43,574 crore) for its share in Jio’s platforms, Amazon had announced a $1 billion investment in India’s micro, small and medium retail enterprises.

“Earlier this year, we renewed our commitment to India by announcing an additional investment of USD 1 billion to digitally enable 10 million micro, small, and medium businesses in the country by 2025, including artisans, manufacturers, retailers, and local shops,” said Amazon’s Pillai.

It is evident that the Facebook-Jio deal is a plan to bring 6 crore small businesses under the umbrella of a singular platform to create a bigger e-market than that of Amazon.

“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India,” Facebook’s Chief Revenue Officer, David Fischer & Ajit Mohan, VP and Managing Director, India, stated as part of its official announcement.

At present, Reliance Jio earns a revenue of around Rs 120 on every customer. The idea of the company was to do expand in all spheres of organised retail – groceries, electronics, apparel companies, life sciences.

Reliance has a presence in the market but its transactions are not yet on a large scale. However, if 3 crore businessmen are associated with the company, its earnings are expected to surge.


What Is Amazon’s Plan With Small Businesses?

On 15 January, when CEO Jeff Bezos visited India, Amazon announced it would be investing an incremental US$1 billion over the next five years to digitize micro and small businesses in cities, towns, and villages across India.

“In a first for Amazon anywhere in the world, we will use our technology, training and enablement capabilities to power local shops across India to sell online,” Gopal Pillai, VP, Seller Services, Amazon India.

The company aims to digitize 10 million MSME with the investment and establish 100 ‘digital haats’ or marketplaces. While the US-based retail giant has 550,000 sellers on the Amazon India marketplace, its eyes are set upon the 6 crore small businesses that Facebook-Jio will attempt to woo as well.

According to the company, the ‘Digital Haats’ will provide services like e-commerce onboarding, imaging and cataloging, warehouse space, logistics, digital marketing, and compliance.

On Thursday, Amazon VP Pillai also added that the company will use its Rs 10 crore to also train small enterprises who wish to be onboarded with the e-commerce giant.

Pillai, in his blog, also added that shops can sign up to act as delivery and pick up points for Amazon.

Shops can sign up for our existing programs that help them earn additional income – ‘I Have Space’ to act as delivery and pickup points, and ‘Amazon Easy’ to offer expanded selection to their walk-in customers.
Gopal Pillai, VP, Seller Services, Amazon India

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