Amazon and Flipkart: Wooing India’s Small Business Owners

India’s leading e-commerce giants, Amazon and Flipkart, are embarking on a competition to attract over 20 million small and medium-sized businesses (SMEs) across the country. The pursuit of these small entrepreneurs begs the question: what drives these companies to target this particular segment with such fervor?

The Lucrative Opportunity

According to Goldman Sachs, this segment comprises 20 million individuals with an annual income of $14,000 each, a figure projected to grow to 26 million with annual incomes reaching $23,000 by 2025. Recognizing the immense potential, both Amazon and Flipkart are keen to expand their business-to-business (B2B) platforms to tap into this lucrative market.

Similar Strategies in Play

Amazon operates its Amazon Global Selling Program, facilitating Indian SMEs’ access to a global marketplace, while Flipkart runs the Samarth initiative, which has already onboarded 135,000 MSMEs. Despite their distinct initiatives, there is striking similarity in the approach adopted by both Amazon and Flipkart towards this business segment.

Collaborating with Government Entities

Both companies are forging Memorandums of Understandings (MoUs) with state governments to collaborate on SME-focused initiatives. Recently, on December 5, Amazon and Flipkart signed MoUs with the government of Punjab. Amazon pledged to work with Punjab Small Industries & Export Corporation to conduct workshops for MSME exporters, granting them access to Amazon’s extensive customer base across 180 countries through the Amazon Global Selling Program. Similarly, Flipkart’s agreement with the Punjab government aims to enhance business and trade inclusion opportunities for MSMEs by integrating them into the e-commerce ecosystem through the Samarth initiative.

Direct Engagement with SMEs

Recognizing the need to educate SMEs on navigating the digital landscape, both Amazon and Flipkart are actively engaging with them on the ground level. Amazon is organizing a two-day summit called Amazon Smbhav, aimed at empowering small businesses by providing insights directly from industry leaders. Gopal Pillai, VP of seller services at Amazon India, emphasized the pivotal role of small businesses in India’s economy and underscored the importance of collaborative efforts to foster their growth and scale. Meanwhile, Flipkart has partnered with industry body FICCI to conduct workshops for SMEs under the theme ‘Winning big with e-commerce,’ aimed at enhancing business capabilities and brand visibility.

In conclusion, Amazon and Flipkart’s concerted efforts to court India’s small business owners underscore the significance of this segment in driving economic growth and innovation. By aligning their strategies with government initiatives and directly engaging with SMEs, these e-commerce giants are poised to unlock the vast potential of India’s entrepreneurial landscape, fostering inclusive growth and empowerment across the country.