Amazon is likely to rely on local kirana stores for last mile business and delivery service.
Amazon is the latest e-commerce giant to set its eye on the offline to online (O2O) model with its India-first program called Local Shops. The company is most likely going to compete with Reliance JioMart in the segment, where many other brands are expected to join up in the near future.
" We will use our technology, training and enablement capabilities to power local shops across India to sell online," Amazon said in a blog post.
Essentially, Amazon has realised that when it comes to delivery of essential products, that too during a situation like a lockdown, the most reliable source of shopping is going to happen through local Kirana stores. And after realising the deficiencies in their network during the past few weeks, the company is now setting its sights on the unorganised retail sector in the country, which is still larger than other forms of retail channel.
"The last few weeks have brought us across an unprecedented challenge. As we focused our efforts to serve only essential products to customers, it was heartening to see how hundreds of retailers and shopkeepers across India, already part of the pilot, played an important role to help the customers in need," the blog post adds.
Amazon claims it has been pilot testing the program over the past six months, signing up with over 5,000 retailers during this time. And going forward, it wants to use its financial clout to target more shops from across the country, and train them as per the needs of this program. "Recognising the urgent need during these times, we are pledging Rs 10 crores to immediately expand our pilot to onboard and train any motivated retailer or shopkeeper who is ready to lean forward with us in this exciting journey."
So what is the main focus of this program? Amazon says local retail shops can sign up with them, list their products on its website and even get Prime badge for certain items, which promises one or two-day delivery. They have to sign up with the company and provide the details given in the image below:
Amazon also assures that if a retailer doesn't have its own delivery system, the company will help them sign up with third-party courier providers like India Post, Bombax, Delhivery, Blue Dart, FedEx and DTDC among others, which will help them scale the business and connect with buyers in other regions as well.
All in all, this program is Amazon's way of saying, we can't compete with the traditional retailers, so it's better to join hands with them and help them digitise their existing business, which helps them expand their market base at the same time.
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