Amazon growth in India and Mexico

Alex OgilvieAlex Ogilvie of Seller Dynamics takes a look at India and Mexico, two of the emerging markets which we know many Tamebay readers are interested in. Alex explains why these two territories are notable and what prompted Seller Dynamics to support them:

Growth in India

indiaThe rate of growth for Amazon in India is clearly giving Amazon’s Jeff Bezos some confidence, given his recent announcement of a further three billion US Dollar investment in India on top of the two Billion already invested a couple of years back. While the investment isn’t simply about marketplaces, the success of the Amazon.in marketplace must have been a significant influencer.

Looking at statistics provided by the Times of India the relative new entrant to Indian ecommerce is making startling progress. The growth in Indian ecommerce is around the 13% mark, a healthy enough level of growth, though perhaps not as rapid as some commentators were looking for. Overall GMV at May 16 is sitting at $10.2Bn versus $9Bn the year earlier. But contrast that with how Amazon.in has performed, a growth of 170%, from $1Bn to $2.7Bn in the same period. Clearly Amazon.in are taking an increasingly bigger piece of the pie or chapiti (delete as appropriate).

So is this something that retailers in the UK should be getting excited about. Well not really, you’ll need to be registered for Tax in India to sell on Amazon. And for Indian companies selling on Amazon there are limitations – none less than the restriction that it is an Indian domestic marketplace only.

Clearly Amazon have spent a lot of effort negotiating with the Indian government to get established, and the investment comes hard on the heals of a change in the Indian government’s views. Back in March they announced that 100% Foreign Direct Investment was now allowed in electronic marketplaces – clearly giving Amazon the confidence to invest more. A result for Amazon undoubtedly, but one suspects that the restriction that the same 100% rule did not apply to those who seek to manage their own inventory on an ecommerce site would have been a frustration for Bezos.

That restriction has no doubt partially ensured that the rate of third party seller adoption on Amazon.in has been faster than otherwise would have been the case. Amazon.in boasts 85,000 sellers, and they also appear to be hungry for more with recent reductions in Amazon commissions on certain categories. Indian marketplaces Flipkart and Snapdeal will no doubt be fighting hard to compete.

Growth in Mexico

Mexico FlagAmazon.in is clearly a marketplace set to grow, you wouldn’t bet against them. Elsewhere there are other encouraging signs as well, launched in June 2015 the full service Amazon in Mexico is set to do well with a Mexican ecommerce sector set to reach over $5Bn in 2018 according to Forrester, with those sales supported by an estimated 18 million online Mexican buyers by then. If Amazon see similar success in Mexico as they have in India then those 2018 estimates may turn out to be pessimistic. Prior to the launch of the full service Amazon, the first quarter of 2015 saw 2.03 million users visit Amazon’s websites per month. While, eBay owned, MercadoLibre had 4.67 million visitors in the same period. With Amazon now selling electronics and homeware etc you would expect them to catch MercadoLibre quickly.

Why did Seller Dynamics add support for Amazon Mexico and India?

Seller DynamicsWe chose to support the Amazon Mexican and Indian sites a while back for obvious reasons and now the ongoing growth is paying off for us. “We could hardly encourage our customers to be ambitious if weren’t the same in nature, that’s why we figured nothing ventured… nothing ventured”.

India and Mexico are just two of the Amazon sites that Seller Dynamics supports – Japan is another Amazon site supported that is further afield, and compliments the support that is also in place for Rakuten.

Alex summed up by saying “We’re not pretending that all the Amazon sites we support are right for everyone, but I think it shows pretty clearly we’ve got the energy and tenacity to get things moving for folks wherever there is a possibility of growth”.