When Reliance outdid Amazon in 2022 and signed new lease agreements with owners of over 800 Future Retail stores, the company dealt a blow to the American giant's offline plans in India. After many twists and turns and legal battles, what was expected to be an easy acquisition of Future Retail by Amazon through its purchase of a 49% stake in Future Coupons has now become unclear. The offline business was supposed to give Amazon India a key growth engine in a complex and dynamic market. Despite this setback, Amazon India is busy doubling down on its growth plans. In June last year, the company committed to investing an additional $15 billion by 2030, taking its total investment in India to $26 billion. This is proof enough of the kind of aggressive growth the Jeff Bezos-founded company is seeing in the Indian market. More than a decade after its foray into India in 2013, Amazon has spread its wings across a variety of businesses and platforms. Today, the company's fulfillment centers span 15 states and contain more than 43 million cubic feet of storage space. The platform has more than 1.4 million sellers and more than 80 million users of its payment service, Amazon Pay.
In a feature article, Krishna Gopalan takes a closer look at where Amazon is heading after more than a decade of operation in India. True, it has a strong competitor in Walmart-owned Flipkart, which is estimated to surpass Amazon in gross merchandise volume (GMV), a key metric in e-commerce. Flipkart’s GMV (excluding fashion division Myntra) was $20 billion in FY23, beating Amazon India’s $18 billion. But Amazon India country manager Manish Tiwari says the story of e-commerce in India is still being written and the company has “only scratched the surface.” Tiwari is right: India’s e-retail penetration is still just 4.3 percent, according to Open Network for Digital Commerce (ONDC) estimates, compared to 25 percent in China and 23 percent in the UK. There is a lot of room for growth.
Speaking of technology, Surabhi gives us details on what is happening as the government prepares to enact a Digital Competition Act to rein in global and Indian tech giants and ensure a level playing field. With several countries considering laws to ensure fair competition in the digital market and big tech companies under investigation for alleged anti-competitive practices, Indian policymakers will have to strike a delicate balance between ensuring fair competition, maintaining the sanctity of use of personal data, and ensuring market freedom. There is a lively debate going on in India, the world's second-largest internet market, around these issues. In discussions with policymakers, many tech giants have said they are not in favour of ex ante regulation. Attention is now on what shape the Digital Competition Act will ultimately take. It will be one of the key pieces of legislation.
