US online retail giant Amazon has made its first foray into India with launch of a shopping Web site, Junglee.com, as it tests the waters for a possible full entry into the nation’s e-commerce market.
India’s e-commerce business is set to boom as incomes and consumer demand climb in a country of 1.2 billion people with a steadily ballooning middle class, analysts say.
Junglee, which means “wild” in Hindi, is a modified version of the world’s top online retailer’s shopping portal, allowing customers to search for different products and compare prices.
It will offer more than 12 million products from more than 14,000 Indian and global brands — but buyers must make their purchases through a network of third-party suppliers either by ordering online or visiting them in person.
The set-up allows Amazon’s Indian Web site to sidestep government rules forbidding foreign multi-brand retailers from operating in India as it only directs shoppers to sites rather than selling the products directly.
The government announced last month it would allow foreign multi-brand retailers such as supermarkets into India, but then did a U-turn over fears the move would hit small family-run stores that dominate the retail landscape.
Analysts say they believe the government still wants to ease regulations to let in multi-brand players, but cannot say when it will happen.
Amazon, which has operations in China, is aiming to give customers “a single online starting point,” Amazon.com vice president Amit Agarwal said last Thursday.
“They can shop a wide selection of products sold by local and global retailers and make informed purchasing decisions,” Agarwal said.
The launch of Junglee comes after Amazon said last month it was setting up its first warehouses, known in its corporate parlance as “fulfilment centers,” in India. The warehouses allow Amazon to store products and ship them swiftly.
Some of Amazon’s biggest competition in India will come from e-commerce portal Flipkart.com, set up in 2007 by two ex-Amazon employees and based in the southern city of Bangalore, that sells a range of goods from books to television sets, analysts say.
As an Indian company Flipkart is exempt from the restrictions that prevent Amazon launching a full-service site.
It is targeting at least US$100 million in sales for the current financial year and US$1 billion by 2015, up from only US$11 million last year as India’s e-commerce market grows exponentially.
Meanwhile, Amazon will open its first real-world shop in just a few months, according to a blog devoted to news about electronic readers such as the popular Kindle.
Amazon spokeswoman Mary Osako on Tuesday declined to discuss the report, saying: “We don’t comment on rumors or speculation.”
Website goodereader.com cited unnamed sources close to the project as saying that Amazon intends to open a small boutique shop in its home town of Seattle devoted mainly to books and the company’s Kindle tablets.
The shop will showcase digital books as well as ink-and-paper editions printed by Amazon’s publishing arm, according to goodereader.
Apple has had phenomenal success with its retail stores devoted to the California company’s coveted iPads, iPhones, iPods and Macintosh computers.