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India’s export value in 2013 was $312 Billion, it has 2X-ed to almost $714 Billion. No wonder Amazon pledged $26 Billion - here’s how it wants to be part of the India export story 👇🏼
Some quick context 🗓️
The ‘Make In India’ movement, production-linked government schemes & foreign direct investment (FDI) pouring into the country helped in the growth of both these segments.
But, why does Amazon wants anything to do with export goal? 🤔
Think of this from a pure macro. China Vs US ties aren't good at the moment, pointing to a worsening scenario. Take the example of sustainable exports for example - Chinese exports to the US are now being charged a 20% import duty.
Amazon’s $26 Billion investment is to bring 10 Million MSMEs online, increase export volume to $20 Billion & in turn create 2 million jobs - by 2025.
India seems like a safe bet for Amazon Global 🇮🇳
Amazon is positioning itself as the player who will solve Indian exports to the US and the rest of the world. Amazon wants to create/ expand & monopolize the exports, for everything commerce.
Here’s Amazon's game plan for exports by 2030 ⬇️
1/ Building the pipeline for Indian sellers 🌍
It launched its global seller program back in 2013, it's investing heavily to get Indian sellers/suppliers to be able to export to the US, UK, Canada, France & Germany. In FY 2023, this has processed $8 Billion worth of exports from over 125,000 exporters.
Some specific regions gaining momentum.
Sri Ganganagar, Rajasthan - $13 million
Haridwar, Uttarakhand - $23 million
Neemuch, MP - $1 million
Kolhapur, Maharashtra - $4 million
2/ Move offline to online, with tech📱
The majority of commerce in India is still retail. The significant friction to take this online is first logistics, demand generation & inventory/ pricing strategy. Amazon wants these sellers to just supply by coming online & let Amazon solve everything else - Amazon Tatkal is one such program.
3/ Picking up strategic ports + Indian railway 🚢
It has partnered with Indian railways for 625 KM western dedicated freight corridor - these cargo trains will now be extremely fast and will connect to Jawaharlal Nehru Port, one of the largest cargo-handling ports in India. To get you the magnitude of this move - in 2018 Jawaharlal Nehru Port alone handled 64% of import traffic & 34% of export traffic - mind blown.
4/ Partnership with India post 📭
With over 1,55,618 offices, Indian post is bigger than SBI's 28,856 branches. Amazon signed a deal to allow it's seller drop off their packages in an India post office, it will pick it up & handle the rest of the logistics.
5/ Opening up for every D2C player 🤯
It recently opened up its logistics API for any D2C brand wanting to use Amazon “only for logistics” - even if the sale has nothing to do with Amazon. Now imagine why Amazon would do this - I want you to think (this reminds me of Shopify & why it would launch it’s plugin marketplace)
That’s all on Amazon’s export capture.
Amazon is that wild Godzilla. It's a strategic advantage & as I like to call it - "Right to Win" is logistics & distribution. It's pushing the needle on both of these to become the monopoly for anyone trying to export to the globe.
We launched "David & Goliath" 🔥
A casual conversation at Third Wave Coffee in Koramangala with Ashutosh turned into a session of incredible insights. How he drove partnerships at Automate.io & essentially built deeper product integrations with Typeform, Slack & even Notion before Automate was acquired by Notion. Almost 180 days after we are launching the “CRAFT of Partnership Led Growth” with him.
Why is Amazon betting big on India exports? 💰
What have #4, #5 got to do with exports? Both of these seem to be very India marketplace specific moves...
Amazing analysis 😃