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Amazon's (AMZN) Local Shops Momentum Boosts E-commerce Efforts

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Amazon (AMZN - Free Report) is firing on all cylinders in the e-commerce market of India on the back of its robust programs focused toward uplifting the local shops, small offline stores, and small and medium businesses (SMBs).

This is evident from the growing momentum of the company’s ‘Local Shops on Amazon’ program, which helps its businesses adopt the e-commerce technology in Maharashtra, India.

The number of offline retailers and neighborhood stores from the state who registered as sellers on this particular program crossed the 11,000 mark.

Most of these merchants belong to the product categories of fresh flowers, home and kitchen products, furniture, electronics, books and toys.

The underlined program gives the sellers an opportunity to expand their customer base beyond their offline capacity.

There are above 75,000 offline retailers and neighborhood stores from more than 450 Indian cities who are registered sellers on the program.

The increasing number of these sellers on Amazon will help it reach out to the customers seamlessly in India where a chunk of its massive population depends on the local shops for basic essentials.

Amazon’s Focus on SMBs

Strengthening momentum across the Local Shops on Amazon program is in sync with the company’s deepening focus on Indian SMBs.

With this program, the e-commerce giant strives to fortifying the businesses of small sellers by making them accessible online during the ongoing pandemic situation, which caused severe disruptions to the offline stores due to social distancing and stay-at-home guidelines.

Amazon pledged to bring 1 million local offline retailers in the country online as part of the Local Shops on Amazon program by 2025.

Apart from this program, the company announced a $1-billion investment of in India at the Smbhav summit in New Delhi in 2020. With this investment, it aims to build digital centers in 100 cities and villages of India. We believe that the proposed digital centers will help more than 10 million SMBs to come online.

The digital centres are brick-and-mortar resource centers with the help of which the e-commerce giant encourages MSMEs to adopt advanced technologies to go online by delivering knowledge, skills and support to the latter.

Recently, Amazon established its first micro small and medium enterprises (MSMEs)-focused digital center called ‘Digital Kendra’ in the country, which is located in Surat, Gujarat.

Other Efforts in India

Amazon is continuously making efforts to bolster its presence in India.

Apart from its focus on small and medium businesses, the company’s recent launch of MiniTV, which is only available to audiences in India, is worth mentioning. MiniTV is a freely accessible and ad-supported streaming service on Amazon's shopping app for Android users. With this, the shopping app became a one-stop destination for customers who can shop thousands of products, make payments and enjoy the MiniTV video-streaming service.

The company is looking to venture into the multi-billion-dollar alcohol-delivery market in the country. It already secured a clearance to carry out the online retail trade of liquor.

Additionally, the retail giant’s Perpule buyout remains significant. Perpule provides mobile payment devices to offline retailers to help them accept digital payments. On the back of this buyout, Amazon will be able to gain a strong momentum among the India offline retailers by helping them boost their customer reach through digital payment acceptance.

These endeavors are likely to continue strengthening Amazon’s overall retail business in India.

However, the company faces strong competition from the likes of Facebook (FB - Free Report) and Walmart (WMT - Free Report) , which are also deeply focused on the India retail space.

Facebook acquired a 9.99% stake in Reliance Industries’ Jio Platforms last year, which remains its notable step in the sector. Its WhatsApp messaging service might also be integrated with JioMart within the next six months.

In addition, Walmart is enjoying a sturdy foothold in the Indian e-commerce market on the back of the solid customer momentum of Flipkart, which is the strongest peer of Amazon.

Zacks Rank & Stock to Consider

Currently, Amazon carries a Zacks Rank #4 (Sell).

A better-ranked stock in the retail-wholesale sector is Revolve Group, Inc. (RVLV - Free Report) , which sports a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Revolve is pegged at 20.71%, currently.

In-Depth Zacks Research for the Tickers Above

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Walmart Inc. (WMT) - free report >>

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Revolve Group, Inc. (RVLV) - free report >>