Amazon's Business Analysis and Strategies for Entering the Indian Market

This study analyses one of the most influential computing business-to-consumer platforms and proposes various improvements for the company to enter a new market. It discusses Amazon's business environment and strategies for entering the Indian market through partnership with Kirana stores. It also discusses challenges and solutions for digitalization, employment, and government policies.

Introduction to Business Environment
Professor:
STUDENT:
Date:
This study analyses one of the most influential computing business-to-consumer
platforms and proposes various improvements for the company to enter a new market.
Amazon is a giant American enterprise engaged in the sales of various goods via the
Internet and their subsequent delivery. It was founded twenty-six years ago by Jeff
Bezos and his wife in Seattle (USA). With sales of over $512 billion a year, Amazon is
considered the most valuable company in the digitalization sector. The enterprise is one
of the biggest with its measures of employers, as it has more than 1 million employers
worldwide, and every year the amount of its workers is growing around the globe.
Amazon operates on five continents, in 20 different countries, in this numbers is
included India, as one of the world's biggest markets.
Regarding efficiency, Amazon is more advanced than its competitors, Alibaba, Walmart,
E-bay, and Shopify.
The next target of Amazon is the Indian market. This giant corporation intends to make
the world digitalized with its platform, so the company tries to enter the biggest markets
in the world. Even though the Indian market is enormous, local stores called Kirana play
a massive role in the economy of India. There are 13 million Kirana stores all over India.
Though Amazon started its operations in India, Amazon is not the only enterprise trying
to seize the Indian market. Here comes Walmart Flipkart and local Ambani Reliance
Industries.
To do this business analysis, it is necessary to analyse how Amazon operates in terms
of the business environment and how Amazon will deal with the number of issues in the
Indian market and solutions. Furthermore, another important thing is how Amazon will
deal with Kirana stores and how the company will make the stores digitalized to some
extent, where online shopping and online payments are nascent in this country.
Amazon is a platform that allows its consumers to buy and sell on its platform. India is a
developing country, and digitalization is new for local people. Every day, more and more
people can access the Internet and smartphones, so Amazon is an excellent

opportunity for local stores and people to buy and become their consumers and sell.
This opportunity makes the Indian market an essential target for giant corporations
searching to globalize their companies. Amazon is a successful growing company in the
American market.
Foreign investors can make investments can be made only with the prior approval of the
Indian Government. There are restrictions on foreign nationals holding shares or owning
businesses in this sector, and they are planning to become more stringent.
Still, one of the challenges that Amazon should face is the Indian Government, as the
political system of India is different compared to the US. The Government is trying to
make foreign investors connect with local small businesses as critical partners. If giant
companies enter the market independently, small businesses will suffer and will close.
This will result in another way of unemployment. So that is why the Government is
putting sanctions on the big companies, for not letting the small businesses be out of
the market. According to the Indian Government, foreign investors cannot invest in the
country without the Government's approval.The Indian Government bans foreign-owned
corporations from being in sales that have warehouses. And here comes the Local
Kirana stores, the neighbourhood stores for the Indian people. There are 13 million
Kirana stores in India, contributing to 90 % of the food and grocery retail. It comprises
the $500 billion Indian market and a 90 % maximum share. These stores sell
everything, including toys, food, and electronics, which are affordable, convenient, and
easy to access.
For Amazon, the giant company, the traditional Kirana stores are an excellent chance to
enter the Indian market. With their partnership, the e-commerce company should make
the Kirana stores digitalized to some extent, and for Amazon, the mom shops are the
key to the success of the Indian market. First, when Kirana stores become online
platforms, these will allow the owners of the Kirana stores to manage their inventory and
use the app to cater to customers. One of the problems of Amazon is the limited Indian
infrastructure and how Amazon is going to deliver the parcels to its clients. Second,
Amazon can use Kirana stores as their zones for delivery services and also for
shopping assistance areas that will help the new users to know how to use e-commerce
platforms and how to place orders online. Hence, there are Kirana stores in every
neighbourhood, so it would be beneficial for both Kirana stores and Amazon to gain new
clients who want to access the way of using the online consuming sector and
smartphones. With coming together Kirana stores, Amazon will deal with the
Government, as there is another policy that foreign investors should sell only the items
to Indian consumers which are manufactured in India, and come up with the statement
that by digitalizing to some extent the Kirana stores, will have contribution for the
development of the Indian local market.

Another issue is the exchange rates with USA, that have decreased (i.e. the Rupee has
decreased versus the US$).
As seen from the chart above, the Indian Rupee is depreciating against the US dollar,
which shows all-time-low results for the currency. So, compared to 9 years, the Indian
Rupee showed more decline against the US dollar than ever. Amazon started to invest
in the Indian market in 2013. At that time, as can be understood from the data, the
Indian currency was higher against the US dollar, so currently, it is more beneficial to
invest in the Indian market and try to talk with more Kirana stores to make their stores
digitalized to some extent. Moreover, the Rupee depreciated because too many dollars
came to Indian country and why not it is beneficial because many foreign investments
were made. This will probably result in a temporary depreciation of the currency, but in
the long run, foreign investments are advantageous for the country's economy.
Moreover, in terms of investment, the Rupee depreciation benefits both Amazon and
Kirana stores. Still, inflation will affect the price of the commodities exported and sold in
the stores.
Conversely, Amazon can make good deals with Kirana stores, like buy one get the
other free, on online platforms so that people can find alternatives online. As Amazon’s

mission is to provide its consumers with low-cost but quality products, this will increase
the number of consumers of local people. In India, there is a concept related to
bargaining so that local people can decrease the price of the product when buying some
products in Kirana stores. This concept will be eliminated, and Amazon combined with
Kirana stores will allocate some chances to the consumers to some good deals, or they
can hand out coupons in Kirana stores for registering Amazon in Kirana stores and get
discounts with these codes, and this will trigger more consumers and more engagement
for using e-commerce platform. Even more, people who lack the technology and
therefore are buying from the Kirana stores might consider knowing how to use or be
indulged in the technology for registering on the platform. Another challenge is the long-
term loan interest rate, which have been increased by 10%. So, Kirana stores use a
concept named buy-now-pay-later. So, consumers of the local neighbourhoods, buy
from the Kirana stores and do not pay upfront, they pay later. The owners of the stores
are keeping loan books for the customers to pay on time for the loans of the goods.
As long-term interest rates have increased by 10%, the rates increased because of the
law of high supply demand of the modification of Kirana stores with the partnership with
Amazon. As Kirana stores need more improvements, the owners of the stores need to
take long-term loans that is why the interests rate of the loans are rising because of the
increase of the demand. If the Kirana’s work well and make their stores work efficiently
they will be able to pay the long-term loans earlier.
The owners of the stores cannot keep BNPL anymore as the interest rates are rising,
and the owners should pay for the warehouses, their loans to the banks, to the suppliers
from whom they are taking the commodity of their stores. Also, the owners of the Kirana
stores, the expansion of their stores, need to take loans with these high-interest rates to
buy a license from the government to open more stores. This is beneficial for Amazon
because Kirana store owners will desire to go on an e-commerce platform and get the
money at once when the consumer is buying the product, not keeping the loan. On the
other hand, Kirana stores being the trustworthy stores in the neighbourhood, may lose
consumers depending on the neighbourhood. People living on salaries and when they
have loans to close will only be able to buy with the concept of buy now pay later. In
both cases, they will lose consumers; otherwise, they will gain consumers online with
the help of amazon’s platform as the company vendor. Here come the strategies, which
are the key to the success of Amazon, and the company with different Kirana stores can
create some artificial demand over some cheap products, which are very requirable for
people who do not have enough money but it is a necessity, so these goods can be
stable half-price products on the platform can be obtained with money, and the demand
will plunge, and the concept of buying one pay later will be eliminated. As the loan
interest increases, people generally take loans from the banks with Rupee; here comes

the problem with the depreciated Rupee, so the percentage of poverty will increase.
India has invested heavily in education on IT technologies, and unemployment rates are
rising. But, as seen from the chart above, the unemployment rate fluctuated for the
current year, but the unemployment rate declined compared with the previous year.
The government invested in education and allowed people to excel more in what they
do. As seen from the chart above, the unemployment rate is fluctuating, as recently it
has been falling, but compared with last year, it was higher than now. Because of the
lack of unemployment, there is a lack of workplaces for professionals. With the
combined partnership of Kirana stores and Amazon, new job opportunities will arise by
extending the stores and developing and digitalizing them. With investing in the IT
sphere, it means that the government is triggered to digitalize the country, which is
beneficial for Amazon.
What tries to do Amazon, through the digitalization of the market, attempts to develop
the Indian economy, where the Kirana stores are a significant part of the government.
The economy will start to grow, and the Gross Domestic Product will rise, which will
mean the country’s economy will be well. Despite this, one of the significant problems
for Amazon is the lack of using smartphones Internet. India has a population of more
than 1.3 billion, but only 900 million cell phone users exist.So, Amazon should try to use
the opportunity of the partnership with Kirana stores and hire more people who know
how to use smartphones and e-commerce to teach people and the owners of Kirana
stores in different neighbourhoods how to use the technology. Thus, it will create more
employment places for the people, who are educated but do not know where to work.

As Amazon helps with the inventory, it will mean the stores would need to have more
workers to follow the quantity of the goods in stock and also a person who is good at
technology for tracking the data of the sales. By helping the stores with delivery and
other e-commerce issues, the owners of the Kirana stores will increase their profitability,
which will benefit the government by making more workplaces.
Moreover, small mom shops in every Indian neighbourhood comprise one-tenth of the
country's Gross Domestic Product. These stores form a significant part of India's
economy. It is very beneficial for the government that Kirana stores would become more
and more nationwide. As mentioned, the Kirana stores are trustworthy for Indian
consumers, and they fulfill the client's needs. They are fast, so for daily use products,
people buy from the small shops instead of waiting for the delivery for several hours.
Moreover, Kirana stores are also crucial for the government because of their
employment. As unemployment rises in India, the government is eager that more and
more small shops can open to decrease unemployment rates. But for opening new
stores, people should pay a sufficient sum for the trading license to the government for
a new store. Through the partnership with Kirana stores, Amazon can create more job
opportunities for Indian people to decrease unemployment, which will also be
advantageous over its competitors. Depending on the neighbourhoods, as people do
not know how to use online payments and e-commerce, Amazon can hire people who
know how to deal with e-commerce and digital payments and send them to Kirana
stores to teach Indian people. It would be easier for Amazon to create employment
places in such a way that will benefit the company and the Kirana stores by making the
stores and the consumers more into technology.
The Indian government has issued a new bond (doubling the number of bonds on the
market).
By issuing more bonds government would have more money to spend in the country.
The money from the bonds would go to building the infrastructure of the country, and
this will be helpful for Amazon and Kirana stores. As being the partner in delivery sector
for Kirana shops, taking the consumer’s good would be much easier. Also, by doing the
bonds Indian government would attract more foreign investors to the country, the money
from which would be invested in the countries economy, and the education. More
workplace would be created and the economy will become healthier.
Amazon is trying to fulfill the needs and create good service for the customers by
creating value. The company tries to face the challenges of the Indian market by making
partnership with the Kirana stores who are the main GDP for the Indian economy.
Moreover, Amazon created opportunities for the consumers who do not have access to
the Internet and technology to use the Kirana store’s internet connection. This analysis
shows that Amazon will be successful company in the Indian market, and by faceing the

challenges will attract the Indian market. So, the shareholders by analysing the current
economy and factors of the Indian market can conclude that with the partnership with
Kirana stores Amazon will become successful in the market.

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