In a bid to strengthen its foothold in India’s highly competitive e-commerce sector, Amazon recently announced that it will cease to charge sellers referral fees for products priced under 1,000 rupees, or US$10.98. This decision, revealed by the company on Monday, is part of an ongoing initiative to attract a broader range of merchants to its online marketplace.
Amazon is building upon its ‘zero-referral fee’ policy that was introduced last year. Initially, this policy was applicable only to about 12 million products that were priced below 300 rupees. However, the implementation of this policy led to a remarkable 50% increase in the number of new sellers joining Amazon’s platform in India.
A referral fee is essentially a commission that sellers have to pay to Amazon for each product sold through its platform. The newly extended policy, which came into effect on March 16, now applies to more than 125 million products.
Along with this, Amazon has also announced a reduction in certain shipping charges, making it even more cost-effective for sellers to use their platform.
Amit Nanda, the director of Selling Partner Services for Amazon India, stated that this move was aimed at “making selling on Amazon more lucrative and simpler, particularly for small businesses and entrepreneurs in tier-2 and tier-3 cities.”
India has become an increasingly important market for Amazon due to its expanding base of internet users, which has significantly fueled e-commerce growth in the world’s most populous country.
However, the e-commerce giant faces stiff competition not just from Walmart-backed Flipkart and the retail division of Mukesh Ambani’s Reliance Industries, but also from quick-commerce platforms such as Eternal’s Blinkit and Swiggy’s Instamart, which have been rapidly gaining market share.
Amazon revealed plans in December to invest more than $35 billion in India by 2030. The investment will not only be used to expand its AI infrastructure, but also to enhance retail logistics and boost small-business growth.
What does Amazon’s new decision entail?
Amazon has decided to stop charging sellers in India referral fees for products priced under 1,000 rupees. It has also reduced certain shipping charges.
What is the goal behind Amazon’s decision?
This decision is aimed at attracting more merchants to Amazon’s online marketplace in India, making the platform more lucrative and simpler, especially for small businesses and entrepreneurs in tier-2 and tier-3 cities.
How does Amazon plan on investing in India’s e-commerce sector?
Amazon has revealed plans to invest more than $35 billion in India by 2030. The funds will be used to expand its AI infrastructure, improve retail logistics, and boost the growth of small businesses.
