Amazon omits India business in earnings, a first in years(techcrunch.com)
techcrunch.com
Amazon omits India business in earnings, a first in years
https://techcrunch.com/2023/04/27/amazon-omits-india-business-in-earnings-a-first-in-years/
47 comments
India looks like a very overhyped market. Most of the wealth lies in a handful of cities. Margins outside are wafer thin to non existent.
Add to it intensive state bureaucracy and need to "grease it" everywhere you go and when whatever you are trying to do.
> Most of the wealth lies in a handful of cities. Margins outside are wafer thin to non existent.
Focusing entirely on large cities and ignoring the hinterland is a perfectly viable option. In fact that is what most consumer businesses in India do.
Focusing entirely on large cities and ignoring the hinterland is a perfectly viable option. In fact that is what most consumer businesses in India do.
36% of India lives in urban areas and that number is increasing rapidly. It's by no means an easy market due to a multitude of reasons (infra, supply chain, politics, corruption, you name it), but if you can pull it off there's plenty of money to be made just in the Tier 1 metros.
It's crazy to think 36% is still over half a billion people. Hard to fathom for someone not from that part of the world.
India, like Brazil is perpetually the "country of the future".
A huge addressable market ≠ A market that wants to be addressed.
I mean to be fair, you also see this in the US and Europe, especially in de-industrialized areas that have had population flight.
The street hawkers are also remarkably underestimated. They manage inventory, prices, and know their customer base FAR better than any large org could. They know the upcoming events, have lower prices, don't pay taxes etc.
IMO whenever Amazon is actually faced with competition THAT KNOWS WHAT THEY'RE DOING they fail.
In the Netherlands someone copied Amazon 20 years ago and by the time the real Amazon showed up they didn't really bother to invest. And we all know how they got decimated in China.
In the Netherlands someone copied Amazon 20 years ago and by the time the real Amazon showed up they didn't really bother to invest. And we all know how they got decimated in China.
This is very true. Amazon wouldn't enter South Korea because there is this company called Coupang, which does everything that Amazon does (eCommerce, video streaming, food delivery etc )
Amazon seems to be investing more in LATAM than India - would love to see the trend continue and spread
At least the last two quarterly slides are similar in terms of lumping International operations ("Segment Results – International" slide #10 in [1], [2]) in one slide.
Is the article about previous qualitative callouts they used to make that were India focused activites that are now deemphasized?
[1]: https://s2.q4cdn.com/299287126/files/doc_financials/2023/q1/...
[2]: https://s2.q4cdn.com/299287126/files/doc_financials/2022/q4/...
Is the article about previous qualitative callouts they used to make that were India focused activites that are now deemphasized?
[1]: https://s2.q4cdn.com/299287126/files/doc_financials/2023/q1/...
[2]: https://s2.q4cdn.com/299287126/files/doc_financials/2022/q4/...
Wish Amazon had a better selection of clothes. Major misstep in my opinion. Though, I still think Amazon's customer service is second to none, I have had issues with products and they have been almost seemlessly returned.
As a former 3rd party seller on Amazon, selling clothing online is a waste of time/money as return rates are enormous and people cheat all the time so no non-manufacturers can actually make any profit. That was in the US, I assume in India the situation is way worse.
As someone who tried buying clothes online I agree with you in a different way. For us customers as well it’s a waste of time. The fit, colour, feel is so impossible to do online that just it defeats the purpose. Now I don’t buy footwear, clothing online at all. Not even underwear. Never!
Why would you assume situation is worse in India by the way?
Why would you assume situation is worse in India by the way?
I never quite understood why you don't get more detailed measurements for clothes when shopping online. If I knew those I could easily filter out most of the returns right away. If I knew, say, how broad the back of a jacket really is, that would be tremendously helpful as I have a rather broad back and lots of jackets that otherwise fit are too narrow there. I get that is additional effort but wouldn't providing those still be cheaper than all those returns?
> I get that is additional effort but wouldn't providing those still be cheaper than all those returns?
Maybe. I suspect many garment are not manufactured to really tight tolerances. Once I found a perfectly fitting trouser at a brick-and-mortar shop. It was so good that I thought I will buy two of the same size right away. Turns out the second was much larger than the first even though according to the label they should have been the same.
So yes, it shouldn't be much extra effort to measure one of each size of each new model. But if you have to measure every single garment that can become a nightmare. And I don't know how much would it cost to tighten up the tolerances in their manufacturing.
Besides I wouldn't know how to measure my own back precisely. Probably a tailor would know a standardised way to measure it but that is not something you can assume your costumers will know. And if the shop is measuring the backs of their jackets differently than the costumers do they will still get returns. Of course they can choose to not accept them, but who would buy from such a shop?
Maybe. I suspect many garment are not manufactured to really tight tolerances. Once I found a perfectly fitting trouser at a brick-and-mortar shop. It was so good that I thought I will buy two of the same size right away. Turns out the second was much larger than the first even though according to the label they should have been the same.
So yes, it shouldn't be much extra effort to measure one of each size of each new model. But if you have to measure every single garment that can become a nightmare. And I don't know how much would it cost to tighten up the tolerances in their manufacturing.
Besides I wouldn't know how to measure my own back precisely. Probably a tailor would know a standardised way to measure it but that is not something you can assume your costumers will know. And if the shop is measuring the backs of their jackets differently than the costumers do they will still get returns. Of course they can choose to not accept them, but who would buy from such a shop?
My impression is that product details are a mess across a whole lot of fields. Most search filter results are very rough, with many results that don't match the filters at all, and matching items buried or excluded. Amazon is the worst at this but other third party seller platforms struggle in this area as well.
I suspect the platforms have decided that it's not worth the trouble to wrangle a large number of sellers into maintaining accurate and consistent product listings.
I suspect the platforms have decided that it's not worth the trouble to wrangle a large number of sellers into maintaining accurate and consistent product listings.
Depends on turnover of inventory. If you get new styles every single week because you are into fast fashion, photos are already a big burden so imagine having very precise measurements. Especially when you know customers typically don't read. It's just not good ROI for a product that might just last a few weeks online. You'd have to show that products with very precise measurements have a substantial lower return rate, which I don't think you can.
I'm in the print-on-demand business. The listings we generate always include a size chart. My observation is that almost nobody ever looks at them.
For whatever reason, people just assume "I'm a S" or "I'm a L" and borderline cases search reviews for "it runs small" or "it runs large". Women's sizes are sometimes numbered (because, of course, women only vary on a single dimension).
For whatever reason, people just assume "I'm a S" or "I'm a L" and borderline cases search reviews for "it runs small" or "it runs large". Women's sizes are sometimes numbered (because, of course, women only vary on a single dimension).
How do people cheat?
If you need something fancy for an occasion and you know you are never gonna use it again then order it on Amazon, preserve the tags, after you done using it, re-attach the tags and return it at Khols within 30 days. No questions asked!
Not sure if parent meant this, but for example by using a winter jacket for a skiing trip or a dress for a party, and returning the item afterwards.
This type of return fraud has a name - it's called "wardrobing."
> return fraud
Is it actually fraud if it's a 'no questions asked returns' policy, and does not specify anywhere you aren't allow to wear it for an extended period of time before returning?
Is it actually fraud if it's a 'no questions asked returns' policy, and does not specify anywhere you aren't allow to wear it for an extended period of time before returning?
If you purchase something with the intent to return it, it's considered fraud.
Interesting. I tried Googling around but couldn't anything concrete that label this as fraud that would put you in legal trouble.
Scenario: You buy a laptop from a local shop, after returning it in person, you say to the Owner: 'Thanks for the laptop, I just needed it for my international trip.' What exactly can he charge you with legally?
EDIT: Ah okay, upon further research it seems like "fraud" and "unlawful" aren't the same here.
Scenario: You buy a laptop from a local shop, after returning it in person, you say to the Owner: 'Thanks for the laptop, I just needed it for my international trip.' What exactly can he charge you with legally?
EDIT: Ah okay, upon further research it seems like "fraud" and "unlawful" aren't the same here.
That's always been the best part of Amazon. They've always made returns super easy with pretty much no questions asked.
> Amazon has poured over $7 billion into its India operations over the last decade and competes aggressively with Walmart-backed Flipkart. Amazon is lagging Flipkart and struggling to make inroads in smaller Indian cities and towns, according to a report by Sanford C. Bernstein. Its global rival Walmart, in contrast, is doubling down on India and has spent close to $2.5 billion in the country this year alone.
I wonder to what extent this is driven by Amazon recognizing that it is losing to Flipkart in India, and doesn't want egg on its face. I remember when Uber finally threw in the towel in China and conceded to Didi. I wonder if Amazon is planning a similar move in India.
I wonder to what extent this is driven by Amazon recognizing that it is losing to Flipkart in India, and doesn't want egg on its face. I remember when Uber finally threw in the towel in China and conceded to Didi. I wonder if Amazon is planning a similar move in India.
Personal experience suggests otherwise. It has been years I have used Flipkart or any other website to order online (or watched anybody I know do so). It is always Amazon. And online purchases are way up, even compared to a year ago.
Almost everybody with a TV I know has a Fire TV stick. Most of my friends have at least one Echo device. A couple have even gone all in and put an Echo in every room.
Prime video is extremely popular, they produce a lot of Indian content and license a lot of regional stuff too. They even telecast a live cricket series recently.
They've even raised prices for Prime subscription, which indicates that they're confident people will pay more for what they're offering. Hardly the signs of "scaling back".
Personally, I feel the article is not well informed. For example it makes the assertion that Amazon is lagging Flipkart. It is absolutely not. Flipkart is a joke. Flipkart sells a lot of exclusive mobile phones on razor thin margins (maybe even net loss), and since phones are relatively high value items the GMV turns out to be higher than Amazon's. Amazon doesn't offer deep discounts on phones, which is fine IMO. GMV is not everything.
Similarly, TFA references Amazon’s "shutdown of multiple services".
1. Amazon Distribution - this was a very small scale operation, maybe the pilot just didn't work out. This was operating in 3 districts in the country (we have 766 districts).
2. Food delivery - this is a tough nut to crack in India, and Amazon was incredibly late to the game. Even established players (Zomato, Swiggy) are always struggling. People simply aren't ready to pay a substantial portion of the bill for delivery in India. This may well turn out to be a wise decision in the long-term. There might be a long struggle and no big profits in this game.
3. Online learning platform - I have no idea why Amazon thought this was an appropriate market for them. They were very late in this too. The competition is cut-throat, and it is a really unique market. I don't think they would have been able to make a space for themselves here.
On the other hand, Amazon launched its second AWS region in India and pledged to invest $4.4 billion in its cloud operations in the country by 2030. Hardly a "scaling back".[1]
[1] - https://techcrunch.com/2022/11/27/amazon-shutting-down-whole...
Almost everybody with a TV I know has a Fire TV stick. Most of my friends have at least one Echo device. A couple have even gone all in and put an Echo in every room.
Prime video is extremely popular, they produce a lot of Indian content and license a lot of regional stuff too. They even telecast a live cricket series recently.
They've even raised prices for Prime subscription, which indicates that they're confident people will pay more for what they're offering. Hardly the signs of "scaling back".
Personally, I feel the article is not well informed. For example it makes the assertion that Amazon is lagging Flipkart. It is absolutely not. Flipkart is a joke. Flipkart sells a lot of exclusive mobile phones on razor thin margins (maybe even net loss), and since phones are relatively high value items the GMV turns out to be higher than Amazon's. Amazon doesn't offer deep discounts on phones, which is fine IMO. GMV is not everything.
Similarly, TFA references Amazon’s "shutdown of multiple services".
1. Amazon Distribution - this was a very small scale operation, maybe the pilot just didn't work out. This was operating in 3 districts in the country (we have 766 districts).
2. Food delivery - this is a tough nut to crack in India, and Amazon was incredibly late to the game. Even established players (Zomato, Swiggy) are always struggling. People simply aren't ready to pay a substantial portion of the bill for delivery in India. This may well turn out to be a wise decision in the long-term. There might be a long struggle and no big profits in this game.
3. Online learning platform - I have no idea why Amazon thought this was an appropriate market for them. They were very late in this too. The competition is cut-throat, and it is a really unique market. I don't think they would have been able to make a space for themselves here.
On the other hand, Amazon launched its second AWS region in India and pledged to invest $4.4 billion in its cloud operations in the country by 2030. Hardly a "scaling back".[1]
[1] - https://techcrunch.com/2022/11/27/amazon-shutting-down-whole...
This provides a very narrow view of India. Anecdotally, I don't know anyone who has any Echo devices in their home. Nobody cares about Fire TV stick, everybody is doing fine with their setup box. Amazon lagging behind Flipkart is very real in numbers, for each of their big sales, Flipkart almost always outsells Amazon. And Flipkart for electronics is almost always better than Amazon. Amazon is miles ahead when it comes to price, but flipkart has them beat where it matters - price and serviceability.
the article is based on Amazons document and not based on subjective personal experiences.
"amazon lagging behind flipkart" comment was in regards to market penetration in smaller towns. Given that all the gier 1 cities are well covered by the tech giants the next market to tap into would be the small cities and towns. the arsicle indicates thats where amazon it falling behind flipkart in making progress.
"amazon lagging behind flipkart" comment was in regards to market penetration in smaller towns. Given that all the gier 1 cities are well covered by the tech giants the next market to tap into would be the small cities and towns. the arsicle indicates thats where amazon it falling behind flipkart in making progress.
As an urban Amazon India user I can say few things:
- Amazon is increasingly becoming unusable. I feel I am browsing spam. And page over page it feels spam hasn’t ended. It doesn’t feel like a shopping experience at all.
- I really can’t trust its reviews anymore. Just can’t. It’s gone. Besides it has some weird logic of placing items. Read again — spam!
- In fact a lot that I would buy from Amazon I buy in stores or from those instant delivery apps like BlinkIt, Zepto (5-15 min kinda delivery)
- Amazon’s Prime delivery is a joke now. There are very very few products that I can get in 1 day or the next day.
- However Flipkart customer support is pathetic. So much that I really dread buying anything there. I buy something on it maybe once in years. But most folks go for reach and price. Customer service is the only reason I still tolerate rest of Amazon.in
- My folks in the village almost always use Flipkart. Some might not have heard of Amazon.
So of this huge arse market — Amazon is alienating its target audience and has never even touched the rest.
- Amazon is increasingly becoming unusable. I feel I am browsing spam. And page over page it feels spam hasn’t ended. It doesn’t feel like a shopping experience at all.
- I really can’t trust its reviews anymore. Just can’t. It’s gone. Besides it has some weird logic of placing items. Read again — spam!
- In fact a lot that I would buy from Amazon I buy in stores or from those instant delivery apps like BlinkIt, Zepto (5-15 min kinda delivery)
- Amazon’s Prime delivery is a joke now. There are very very few products that I can get in 1 day or the next day.
- However Flipkart customer support is pathetic. So much that I really dread buying anything there. I buy something on it maybe once in years. But most folks go for reach and price. Customer service is the only reason I still tolerate rest of Amazon.in
- My folks in the village almost always use Flipkart. Some might not have heard of Amazon.
So of this huge arse market — Amazon is alienating its target audience and has never even touched the rest.
Amazon feels like spam here in Europe too. Sketchy-looking products from weird brands that I have no faith in. A simple search fails to turn up items matching the keywords I entered (even though those items do exist in their catalog) and instead gives me a dumpsterload of garbage results. Increasingly Amazon is my absolute last resort.
I have the same experience. I still prefer ordering from Amazon due to the shipping, but I find my self needing to spend more and more time off Amazon looking for an adequate product because Amazon’s search has been taken over my cheap Chinese crap from sellers with names like UDIAMI. I wish they had an option to filter things like that.
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In North America it's spammy as well. I have maintained for a while that Amazon is basically Alibaba with better English copy and delivery times.
The American version is far, far spammier!
Coincidentally, I made the biggest value purchase I have ever made online (from an ecommerce store) yesterday on Amazon.in
I was in the market for a 43" TV. Needed a Samsung. I checked two reputed local electronics stores (from where I have made purchases earlier; including the store where I bought my current Samsung 32" TV I was replacing after 13+ years).
Both stores quoted a price over the phone. The store I bought my 32" TV came in INR 700 (around $9 USD) lower. This was a 43" Full HD TV.
I then checked amazon.in website. They offered a Samsung 43" UHD TV (i.e., better resolution) at a price that was INR 100 lower than the best price I got from the physical stores. (It was a Limited Time deal, but one that met my requirement).
The product was Fulfilled by Amazon and Prime delivery eligible. I got the TV delivered this morning and Samsung is sending their tech for installation tomorrow. (Amazon handles this seamlessly -- they do for a lot of partner brands).
I would say they met my expectation (on delivery). I'll update after installation by Samsung.
My summary of Amazon (India) experience:
- They are great if you know exactly what you want
- The Prime eligible products Fulfilled by Amazon are good
- I have even returned some products before and so far, that experience has been exemplary. I have no complaints.
I generally avoid other marketplace sellers on Amazon.
I was in the market for a 43" TV. Needed a Samsung. I checked two reputed local electronics stores (from where I have made purchases earlier; including the store where I bought my current Samsung 32" TV I was replacing after 13+ years).
Both stores quoted a price over the phone. The store I bought my 32" TV came in INR 700 (around $9 USD) lower. This was a 43" Full HD TV.
I then checked amazon.in website. They offered a Samsung 43" UHD TV (i.e., better resolution) at a price that was INR 100 lower than the best price I got from the physical stores. (It was a Limited Time deal, but one that met my requirement).
The product was Fulfilled by Amazon and Prime delivery eligible. I got the TV delivered this morning and Samsung is sending their tech for installation tomorrow. (Amazon handles this seamlessly -- they do for a lot of partner brands).
I would say they met my expectation (on delivery). I'll update after installation by Samsung.
My summary of Amazon (India) experience:
- They are great if you know exactly what you want
- The Prime eligible products Fulfilled by Amazon are good
- I have even returned some products before and so far, that experience has been exemplary. I have no complaints.
I generally avoid other marketplace sellers on Amazon.
My wife is currently in India and I was using the Indian site to buy something for her. You’re absolutely right, Amazon is a mess any way but the Indian version was almost unusable.
Counterpoint from another urban Amazon India user:
- Amazon is still the first place I look at when I want to buy something
- While the availability of next day delivery has reduced, shipping times are still decent and more importantly reliable
- Amazon Fresh has a much better selection than any instant delivery app and I can usually get same day delivery
- Cities account for the overwhelming majority of discretionary spending suited for e-commerce. I am not convinced servicing most small towns in India is profitable. The so called huge market is not something you can make money from.
- Amazon is still the first place I look at when I want to buy something
- While the availability of next day delivery has reduced, shipping times are still decent and more importantly reliable
- Amazon Fresh has a much better selection than any instant delivery app and I can usually get same day delivery
- Cities account for the overwhelming majority of discretionary spending suited for e-commerce. I am not convinced servicing most small towns in India is profitable. The so called huge market is not something you can make money from.
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Hmm I wonder if my buying habits are different but I have never browsed Amazon to check products. Anytime I want to buy something, I always have the exact brand/product in mind. Never felt the spam issue or Prime delivery issues either. Maybe it has become mostly concentrated in the cities? Agree on Flipkart customer support.
There is an initiative called ONDC [1] that is aiming to bring to e-commerce in India the same kind of network based approach that the Unified Payments Interface (UPI) did for payments.
ONDC's charter is quite ambitious and it is trying to become the network for ecommerce in the country.
While it is absolutely not a contender to the established ecommerce players in terms of reach, spread, depth etc., yet, it could be a gamechanger if it gets adopted far and wide.
I don't for a moment claim this is perhaps the cause for Amazon to scale down ops in India. Just pointing a broader trend and strategic threat.
[1]: https://ondc.org/
ONDC's charter is quite ambitious and it is trying to become the network for ecommerce in the country.
While it is absolutely not a contender to the established ecommerce players in terms of reach, spread, depth etc., yet, it could be a gamechanger if it gets adopted far and wide.
I don't for a moment claim this is perhaps the cause for Amazon to scale down ops in India. Just pointing a broader trend and strategic threat.
[1]: https://ondc.org/