Bezos pledges $1 billion to digitize small businesses in India

Bezos pledges $1 billion to digitize small businesses in India (Photo: Shutterstock)

At the inaugural Amazon Smbhav summit in New Delhi on Tuesday, Jeff Bezos announced that the e-commerce giant will invest $1 billion over the next five years to digitize micro and small businesses across India and help them “reach more customers than ever before.”

Bezos’ announcement came a day after the Indian government slapped the company with an antitrust probe following allegations of Amazon’s anticompetitive practices leveled by the Confederation of All India Traders (CAIT). The antitrust probe, which also has hit Amazon’s Indian rival Flipkart (now owned by Walmart), will investigate the discounts that the companies offer and the promotion of private labels on their respective marketplaces. 

Neither Bezos nor Amit Agarwal, the head of Amazon India, addressed these concerns at the Smbhav summit, designed to bring more than 3,000 small businesses together to foster synergy between sellers within the Amazon ecosystem. Over the years, Amazon India has accrued more than 500,000 sellers in the country and also accounts for thousands of sellers on Amazon marketplaces outside India. 

Speaking at the event, Bezos called the India-U.S. alliance the most important trade partnership of the 21st century, even declaring it to be “the Indian century.” Amazon’s investment in the Indian e-commerce industry is estimated at roughly $5.5 billion to date. 

India is one of Amazon’s most important foreign markets and arguably one of its fastest growing. The penetration of internet services has brought over half a billion Indians online in the last decade. 

“This [Smbhav] initiative will use Amazon’s global footprint to create $10 billion in India exports by 2025. Our hope is that this investment will bring millions more people into the future prosperity of India and at the same time expose the world to the ‘Made in India’ products that represent India’s rich, diverse culture,” Bezos said at the summit. 

Meanwhile, protests against Amazon by CAIT thickened Wednesday, with the trade group announcing demonstrations against the company in 300 cities across India. CAIT, which represents about 70 million storefront retailers, hopes to highlight what it calls predatory pricing and anticompetitive practices through these protests coinciding with Bezos’ visit. 

Although e-commerce in India currently accounts for only 3% of total retail sales, a report published by Nasscom and PwC India forecast the country’s e-commerce market will hit $150 billion by 2022. 

The Indian government is taking note. A 2019 regulation banned exclusive sales on e-commerce sites because they excluded brick-and-mortar retailers from selling the products. The law also put a cap on discounts and cash-back promotions that were commonplace on e-commerce sites. This reportedly forced Amazon to phase out roughly 400,000 products from its Indian inventory. 

However, the new antitrust probe does not seem to have ruffled Amazon’s feathers.

“We welcome the opportunity to address allegations made about Amazon. We are confident in our compliance and will cooperate fully with CCI,” said an Amazon spokesperson in a statement to TechCrunch

As ordered by the director general of India’s Competition Commission, the probe is expected to be completed and a report filed within 60 days.