Interviews

Amazon Business in 2023: Celebrating Six Years of Unprecedented Growth and Development in India

CXOtoday has engaged in an exclusive interview with Mitranjan Bhaduri, Head, Amazon Business Marketplace, India

 

  1. How was Amazon Business’ journey in 2023 and how did the 6th year in India fared in terms of development and growth?

In 2017, Amazon Business debuted in India with a mission to revolutionize the way businesses buy and sell in the country. Initially, we had only 14K sellers and a limited selection of products. Since then, we’ve grown Amazon Business into the largest aggregator of GST-enabled selection, offering over 19cr+ products from more than 10lac+ sellers, delivering to over 99.5% of pin codes across India.

We have witnessed an exponential growth, with our customer base increasing at a CAGR of 106% and have seen overwhelming response from tier II and III cities, with 67% buying customers and 55% orders coming from smaller cities.

Our Marketplace offers easy online procurement, serving a wide customer and seller base along with the various features to manage purchases efficiently. This includes benefits such as volume discounts, bulk purchase assistance and post spend analytics. This helps our customers save time and money by streamlining their procurement processes and provide them with insights to make informed purchasing decisions. More than the growth figures, what gives us even more satisfaction is the voice of our happy customers:

  • LT Foods Ltd: “Amazon Business has become our go to partner for our retailer gifting program that we do for our retailers and distributors. We are also looking forward to start our office supplies and IT procurement through Amazon B2B. The free credit and ease in tracking of spends, through business analytics reports, has helped us save significant time in invoice reconciliation”.
  • Physicswallah: Offering an extensive array of products at competitive prices, Amazon Business now serves as our ultimate destination for fulfilling diverse B2B procurement needs. From office furniture to IT products, we used to engage various vendors for distinct categories. However, with Amazon Business, we consolidate orders with agreed-upon pricing and effortlessly monitor our expenses.”

In 2023, during our 6th anniversary celebration, we introduced an exciting integration with Amazon Pay Later. This initiative enables eligible business customers to buy on 30-day interest-free credit, extendable to 12 months at minimal interest rates, with no hidden costs. This helps businesses to manage their purchases efficiently, through a seamless payment experience with built-in security features and auto-repayment options. Looking ahead, we anticipate that credit adoption will contribute to over 25% of sales in the next three years.

Additionally, we’ve seen a significant increase in large enterprise customer engagement, prompting us to enhance our offerings further. In 2024, we launched 2 key features to simplify procurement for large enterprises – Supplier consolidation through ‘Invoice by Amazon’ feature where customers can source from multiple sellers on Amazon Business marketplace but receive a consolidated invoice from a single seller; Procurement platform integration through “Punch Out” feature which enables Enterprise customers to integrate their procurement systems with Amazon.

 

2. How has Amazon Business facilitated the progress of business customers in India through e-procurement?

Amazon Business is leading the digital revolution in procurement across India, aligning with the Digital India mission by providing a dependable and efficient online platform for businesses to procure goods and services. Our procurement solutions offer:

  • Range of Selection: In partnership with over 10lac+ sellers, we offer the largest selection of over 19cr GST-enabled products across categories such as computers, electronics, industrial supplies, large appliance to daily office essentials like pantry supplies, stationery, cartridges all on a single, convenient platform.
  • Bonus Savings: We provide additional savings through bulk discounts, exclusive deals and by enabling GST input credit. We support businesses including small offices, home offices, educational institutes, hospitals, hotels, and restaurants, with frequently purchased business supplies and products at wholesale prices. We simplify access to bulk buying benefits through our assisted sales channel with the capability to ‘Request for Quotes’.
  • Credit Extension: Eligible customers can avail 30-day interest free credit through Amazon Pay later from credit extension through Amazon Pay Later and can access 30-day interest free credit.
  • Feature Rich Experience: We provide access to features like Multi-user accounts which allows businesses that have multiple team members to add users under one Amazon Business account and set up approval policies and budget guardrails separately for each team; ‘Bill to Ship to’ allows business customers to buy from one location and ship to another location without compromising on the GST input credit; Supplier consolidation through ‘Invoice by Amazon’ feature where customers can source from multiple sellers on Amazon Business marketplace but receive a consolidated invoice from a single seller; Procurement platform integration through “Punch Out” feature which enables Enterprise customers to integrate their procurement systems with Amazon.
  • Fast and Reliable Delivery: With delivery available across 99.5% of pin codes, customers can rely on Amazon’s trusted delivery experience. Additionally, 43% of products of interest can be shipped within 2 days
  • Ease & Convenience: Our Amazon Business Android and iOS mobile apps are optimized for on-the-go business purchases, ensuring ease and convenience for our customers.

 

3. What specific strategies and initiatives has Amazon Business employed to cater to the tier 2 and 3 market, and how has your journey evolved in this region?

We have 67% of our buying customers and 55% of sales originating from tier 2 and tier 3 markets. Additionally, these markets exhibit 1.2X faster growth compared to tier 1 cities. which is an encouraging trend for us indicating considerable growth potential in smaller cities and towns across India. We ensure that we cater to the diverse needs of MSMEs and provide them with distinct options to resolve their challenges. Over the course of time, Amazon has digitally transformed millions of MSMEs nationwide, and we aim to continue this momentum by addressing the needs of both existing and potential customers through innovative services.

We have specific benefits for the MSMEs in the tier II and III cities to help them with their requirements such as:

  • Language support: Amazon Business supports 7 languages which helps to bridge the language barrier and make it easier for MSMEs in deeper geographies to use the marketplace
  • Reduced logistics costs: We offer wide range of delivery options, including doorstep delivery across over 99.5% pin codes which helps MSMEs in deeper geographies lower their logistics expenses. This is particularly beneficial for MSMEs located in areas with limited connectivity.
  • Extensive selection: Our wide selection increases MSMEs’ awareness of available products, varieties, prices, and quality nationwide. This addresses the challenges faced by MSMEs in regions with limited media exposure to a great extent.

 

4. What key areas is Amazon Business prioritizing in the upcoming months in India?

More and more business customers are moving from offline procurement to online procurement for transparent pricing, easy access to the wide selection and quantity deals, better control on the spends and visibility.

At Amazon business, we are continuously building solutions for our business customer and introducing features and capabilities and we have seen encouraging trends such as:

  • Tier 2 and tier 3 are becoming more digital savvy which is reflected in growth. With 65% buying customers coming from smaller cities in 2023 year growing at 18% YoY
  • Bill To, Ship To: Distributed buying has become a prominent trend. This comes from the fact that tens of thousands of our customers have used the bill to, ship to feature which enables the customer to buy from one location and ship to another location without compromising on the GST input credit.
  • Bulk Buying: Even medium and large enterprises prefer simplicity in their buying process and for their regular spends want to avoid the hassles of negotiation evidenced customers preferring pre-configured bulk discounts on AB going from 27% in 2022 to 37% in 2023.
  • Credit Adoption: Since launch, 141K customers have adopted credit through Amazon Pay later.
  • Customers prefer to buy on the go. We have seen share of orders on mobile increase from 59% in 2022 to 65% in Q1’24.

Amazon Business will continue to support business customers in their digitization journey by focusing on:

  • Increasing the range of products available to enable faster growth
  • Improving speed and accuracy of deliveries to reduce the working capital requirements
  • Competitive pricing to improve their profitability
  • Convenience especially in terms of mobile purchasing
  • Enhanced analytics suite providing near real-time insights to help businesses with more visibility into their spends to track rouge spends and efficiency across spending units especially for businesses with multiple offices or more than one procurement manager.
  • Digital documentation and e-invoices to help business reduce manual reporting and allow for faster availability of input tax credit

With evolving trends, we are committed to evolve and expand with the ecosystem.