Amazon India expands incentives, services for third-party sellers

Bengaluru: Amazon India is rapidly expanding services and incentives for third-party sellers and websites offering affiliate marketing and Amazon payments services, as it looks to offer a comprehensive set of support services and differentiate its offering from those of its rivals.

Amazon affiliates are third-party sites that help drive customers to the e-commerce platform for a fee.

Amazon has thousands of such affiliates, including a coveted partnership with Indian Railway Catering and Tourism Corp. (IRCTC), one of the most visited sites in the country.

“We’re focused on providing the tools to our affiliates so that they can improve the customer experience; it’s an important channel of traffic for us,” said Amazon India country head Amit Agarwal. “One of the big affiliate partnerships we struck recently was with IRCTC. We are powering their entire shopping and it’s a co-branded site now. Through that partnership, we will do a lot of experiments together to figure out how we can improve the experience for their customers and our customers.”

Affiliate marketing is just one of the support services Amazon offers. Apart from its reputed logistics network and online seller registration, Amazon has other offerings, such as advertisements.

Mint reported last week that the company has launched high-margin advertisement services for sellers and brands, such as offering prominent product positioning for a fee and display ads, across its mobile and desktop platforms, to build loyalty with sellers and boost sales.

Amazon is also increasing distribution of its payments service, Pay with Amazon. The service, launched in India in October 2014, is used by more than 50 third-party sellers and online retailers as well as 150 sellers on price comparison site Junglee, which is owned by Amazon.

Support services are a big differentiator for Amazon, said Harminder Sahni, the managing director of Wazir Advisors.

“This is where their technology expertise will be hard to match for others. These services require massive investment, in terms of people and money, and they aren’t easy to build and perfect.The marketplace/retail business is commoditized but there’s a lot left to do in the support services, such as ads, payments, etc.,” said Sahni.

“Taking the Amazon payment experience and moving it to third-party websites allows us to increase the reach of Amazon, both from a buyer and seller perspective,” said Srinivas Rao, general manager, payments, at Amazon India. “Sellers can focus on their core functions of sourcing and fulfilment of products and leave the payment processing to Amazon. For customers, it’s a win, too, as they are familiar with the Pay with Amazon experience.”

Amazon’s rapid expansion in just two years has made it the biggest threat to Flipkart and Snapdeal, and the company is using its expertise in support services to gain an edge over these rivals. Flipkart and Snapdeal both offer some of the same services, such as logistics and affiliate marketing, but they don’t have the expertise and efficiency gained by Amazon over more than 10 years in the US and other markets.

The world’s largest online retailer started out in India as a marketplace in June 2013 and, a year later, Amazon chief executive officer Jeff Bezos announced the parent company would pump in as much as $2 billion in the India business over time, signalling its ambition to become the top e-commerce firm in the country.

Bezos visited India for five days towards the end of September last year to encourage Amazon India executives to build on their launch. He also met with business partners and political leaders, including Prime Minister Narendra Modi.

India is the last big unconquered e-commerce market left in the world and given that Amazon has missed out on China to local rival Alibaba Group Holding Ltd, the company is eager to dominate e-commerce sales in India.

“For the seller, what matters is sales, profitability and a fair, predictable, transparent platform. We have built the most comprehensive set of products for any seller of any scale to get online. For the buyer, what matters is selection, low prices, convenience. When I look at these things that matter to our two sets of customers, we are by far in a leadership position. What that allows us to do is to have confidence that more and more buyers and sellers will select us over the long term,” said Amazon’s Agarwal.