Amazon, a US-based company, forayed into the Indian market around 2012. It had all the ingredients to be one of the leading e-commerce players in India. The experience of being an e-commerce website was there, it was one of the biggest companies in the world and from the outside, and Amazon India just needed to exist to topple all the other players. However, that was not the case.
They faced steep competition from Flipkart, its Indian counterpart. Amazon’s USA based business mattered zero in the Indian market, they had to build from scratch and win over the Indian hearts in any scenario. They have pretty much managed to do that as it has outgrown everyone except Flipkart. It has swum deep into the Indian market and has discovered many branches to foray into. Amazon has a lot of subsidiaries in India now.
Its Amazon Pay is doing well if we are to believe the numbers. It has started its grocery stores and there are around 160 million products differentiated in countless categories for us to choose from. There is nothing secondary about the businesses Amazon has. It offers the Prime services at a very affordable price, the Prime Video is very well rooted now and Amazon Music is doing its rounds as a music app.
However, these are the businesses which come to our notice. There are some businesses which are not visible to the naked eye but are making loads of money for the company. One of those business or a subsidiary is Amazon Wholesale. Now Amazon Wholesale is a new thing but has already impressive numbers to show.
Basically, Amazon Wholesale is Amazon’s Indian Business-to-Business platform (B2B). It is a marketplace where Amazon Wholesale gets products directly from the brands and then passes it forward to the vendors who sell it online on their platform. This has brought in a lot of money for Amazon. There is a similar model which Flipkart has in place which goes by the name of Flipkart India.
Amazon Wholesale grew 73% from the year before financially. It has generated the revenue of $1.68 billion that is around INR 12,224 crore in FY 2018. In 2017, the revenue was around $970 million and has grown from there. That said, this is one of the highest growth rates amongst its subsidiaries in India. Previously, Amazon had rented its business Cloudtail.
Cloudtail, however, from 2016 it has moved everything to Amazon Wholesale. This has stagnated Cloudtail’s growth and revenue. Even then, Cloudtail, the joint venture of Amazon and Catamaran of Narayan Murthy, registered a growth of 27% and revenue of $966 million. That said, Amazon India is rumored to reach around $70 billion in Gross Merchandise Value (GMV) and $11 billion in net sales by the end of 2027. It is currently approximated at $16 billion in worth.
– Unmesh Phule