When Reliance outsmarted Amazon in 2022 by signing fresh lease agreements with the owners of over 800 Future Retail stores, it dealt a blow to the American giant’s offline plans in India. Today, after several twists and turns and courtroom battles, what Amazon reckoned would be a straightforward acquisition of Future Retail by way of its 49% stake in Future Coupons, looks uncertain. The offline piece would have given Amazon India an important engine of growth in a market that is complicated and dynamic. Despite this setback, Amazon India is busy doubling down on its growth plans. Last June, it committed to investing another $15 billion by 2030, taking its total India investments to a hefty $26 billion. That’s ample evidence of the kind of aggressive growth the Jeff Bezos-founded company sees in the Indian market. Over 10 years since it stormed into India in 2013, Amazon has spread its wings across businesses and platforms. Today, its fulfilment centres are spread across 15 states, with over 43 million cubic ft of storage space. There are over 1.4 million sellers on the platform and Amazon Pay, its payments offering, has over 80 million users.
In our cover story, Krishna Gopalan takes a close look at where Amazon is heading after completing over a decade in the country. To be sure, there is serious competition too in the form of Walmart-owned Flipkart, which is estimated to be ahead of Amazon in terms of gross merchandise value (GMV), the key metric in e-commerce. In FY23, the GMV of Flipkart (minus its fashion arm Myntra) was at $20 billion to Amazon India’s $18 billion. But Amazon India’s Country Manager Manish Tiwary says the e-commerce story in India is still being written, and that companies have “barely scratched the surface”. Tiwary is right: going by estimates of the Open Network for Digital Commerce (ONDC), Indian e-retail penetration is still at a puny 4.3% to China’s 25% and the UK’s 23%. That’s major headroom for growth right there.
Talking about tech, Surabhi gets you the details about what’s cooking as the government gets ready with a digital competition law to rein in global and Indian tech giants and ensure a level playing field. While several countries have been mulling legislation to ensure fair competition in digital markets, and Big Tech firms are being probed for alleged anti-competitive practices, Indian policymakers will need to strike a fine balance between ensuring fair play, maintaining the sanctity around usage of personal data, and ensuring market freedom. There’s animated discussion around these issues in India, the world’s second-largest internet market. In discussions with policymakers, many tech giants have said they aren’t in favour of ex ante regulations. All eyes are now on what final shape and form the digital competition law will take. That’s going to be one critical piece of legislation.