Amazon ( AMZN Quick Quote AMZN - Free Report) is firing on all cylinders in the retail market of India on the back of its growing digitization efforts focused on uplifting the local shops, small offline stores, and small and medium businesses (SMBs). This is evident from the latest launch of its Smart Commerce initiative at its annual summit, Amazon Smbhav, in the country. Notably, Amazon strives to support and accelerate the digitization process of local stores with its new initiative, thus transforming them into ‘Digital Dukaans.’ Smart Commerce aids the shops in digitizing their offline operations, creating online storefronts and delivering a better shopping experience to walk-in customers. We note that the first set of solutions under the initiative will be released in the coming weeks. The solutions will be focused on digitizing billing and inventory management. Also, these will help local stores in improvising in-store experiences for customers. After this, further capabilities will be released as part of Smart Commerce, which will be dedicated to helping the stores in building their online storefront quickly. Also, these will aid them in facilitating simple voice and chat-based shopping features to customers. We believe that all these benefits will aid Amazon in gaining strong traction among local shops, which are several in number in India and most of the people are dependent on these shops. Amazon’s Focus on SMBs
The latest move bodes well for the company’s deepening focus on India SMBs.
With Smart Commerce, local stores will be able to leverage Amazon’s robust logistics service, digital payment ability and other shopping features at their physical store on Amazon.in or at their online storefront. Apart from the underlined initiative, the e-commerce giant is continuously gaining momentum across the local shops on the back of its ‘Local Shops on Amazon’ program, which has already brought more than 1.5 lakh stores on Amazon.in. Notably, the company pledged to bring 1 million local offline retailers in the country online as part of the Local Shops on Amazon program by 2025. In addition to this, the company recently launched a storefront on Amazon.in, which is focused on empowering women-owned small businesses. The storefront showcases several products offered by more than 800 women sellers and those sellers associated with various organizations promoting women entrepreneurship. The increasing number of Digital Kendras in the country remains another major positive. Notably, Digital Kendra is a micro small and medium enterprise (MSME)-focused digital center, which encourages MSMEs to adopt advanced technologies to go online by delivering knowledge, skills and support. With all these endeavors, Amazon remains on track to fulfill its pledge of digitizing 10 million SMBs, which was announced at the Smbhav summit 2020. The company has already digitized more than 4 million small businesses and local stores as part of its above-mentioned pledge. To Conclude
The above-mentioned endeavors are expected to strengthen Amazon’s relationship with SMBs in India. This will continue to bolster the seller base on Amazon.in.
This, in turn, will expand product offerings on the company’s e-commerce platform, which will likely accelerate the shopping rate on the platform. Consequently, this will help the company in expanding its presence in the retail market of India. However, Amazon is currently bearing the brunt of inflationary pressure, elevated staffing costs and supply-chain disruptions. Moreover, uncertainties related to the coronavirus pandemic and ongoing tensions between Russia and Ukraine remain overhangs. A slowdown in online shopping activities compared with the last two years, as a result of normalization toward pre-pandemic levels, is a major headwind. Zacks Rank & Stock to Consider
Currently, Amazon carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the retail-wholesale sector are AutoNation ( AN Quick Quote AN - Free Report) , The Kroger ( KR Quick Quote KR - Free Report) and Costco Wholesale ( COST Quick Quote COST - Free Report) . While AutoNation currently sports a Zacks Rank #1 (Strong Buy), Kroger and Costco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. AutoNation has returned 10.3% over a year. The long-term earnings growth rate for AN stock is currently projected at 24.74%. Kroger has gained 31.8% over a year. The long-term earnings growth rate for the KR stock is currently projected at 9.88%.
Costco has gained 12% over a year. The long-term earnings growth rate for the COST stock is currently projected at 9.09%.