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

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