Amazon Enters India

I was delighted to learn that amazon.com had finally begun to offer services in India, albeit in a very limited manner, through a website called www.junglee.com.

According to a Bloomberg report [2 February 2012], "Junglee, which doesn’t take direct payments from shoppers and connects them to other sites, gives Amazon a presence in India, which bars foreign sellers of multiple brands. “Amazon will get a foothold in the Indian market,” said Sameer Narang, a Mumbai-based analyst with HDFC Securities Ltd. “They’ll be able to understand the market, customer behaviour, the logistics in the country. In a couple years, the market has to open up so they’re just warming their feet.”

"Amazon, whose moves have been closely watched for any sign of an imminent entry into the Indian retail market, will not sell or buy anything in the country for now. Instead, it will direct customers to both online and offline vendors listed on Junglee," added The Economic Times [3 February 2012]. "Amit Agarwal, vice-president of Amazon, would only say Junglee would "help customers discover products from online and offline retailers in India and from Amazon.com". "Its recent moves to set up a fulfilment centre (in Mumbai) and now the Junglee launch certainly look like precursors to a retail launch whenever the government allows FDI in multi-brand retail," said Devangshu Dutta, CEO of retail consultancy Third Eyesight. A legal expert at one of the country's largest law firms said Amazon was making a 'clever entry'. Agarwal said Junglee will display over 1.2 crore products and 14,000 brands for Indian consumers. The company has also launched Amazon seller services in India where vendors can hook up to Amazon's portal to acquire customers."

Despite the restrictions and despite the fact that Indian buying products via junglee.com will have to pay shipping and customs duty, it could still be cheaper to source many materials from it than through local vendors, who are more often than not simply traders.

My own experience is edifying. I had been trying to lay my hands on a Transfer Punch Set (see photo below)for many months. These punches are useful if you wish to transfer the exact centre of a hole to another. It is very necessary for accuracy in making machine parts, jigs and so on. I have been trying to make a router table out of polycarbonate and plywood and have not succeeded because I cannot make an accurate template of my router base. Anyway, I went to my usual suppliers in Delhi's Chaawri Bazar and found most of them had not even heard of a transfer punch set. One, pretty well known supplier, said he could get in for me for Rs 3,5000 and that too on full advance payment. I felt the price was too high and began searching the Internet for Indian companies manufacturing transfer punches. There was one Delhi based company that did make them and replied when I sent them an email but after that there was no response whatsoever. I even called them to find out but they sounded vague and uninterested. I finally gave up in disgust. Yesterday, I finally ordered them via junglee.com for a total price inclusive of customs duty and shipping for Rs 2,700 - much cheaper than the Chaawri bazaar offering, I found.

Transfer Punch Set
I have purchased specialised router bits and other imported items from vendors in India and found that I have ended up paying too much and usually waiting for too long. There are many traders in India who establish some kind of a tie up with foreign manufacturers and offer their products in India. All they do is import the products on order, add a hefty margin and ship them onwards to the customer. It is a slow and expensive process. Direct purchases via amazon.com would be much cheaper and sooner or later the traders, who offer no service or backup, will go bust.

Also affected would be the Indian subsidiaries of companies like Bosch, Hitachi, Black & Decker, Makita and so on. The Indian arms of these companies behave more like trading houses and sell products at a huge mark up in the Indian market, which is still very much a seller's market. You usually have to call up dealers, negotiate a price and then wait weeks for your product. This process is greatly simplified by buying through amazon.com or any other online retailer. MNCs such as Bosch also offer very poor support for their accessories range; most accessories advertised in their catalogue are not available in India. Plus, I was shocked to find how much cheaper a number of power tools were on junglee.com. Check it out and you will know how Indian vendors have been ripping us off!

Good luck with online shopping for your DIY needs.

3 February 2012.

Comments

  1. Google.com has lot of offers but shipping charges are high. It will discourage buyers from India.
    Mumbai

    ReplyDelete
  2. Anonymous18 June, 2012

    Hi,
    Just got a shipment delivered from Amazon directly to India (without any agents etc).I ordered directly at Amazon and they included shipping and customs deposit.
    This was very convenient and cost effective and reached me in 8 days

    regards,
    Basker

    ReplyDelete
  3. Yes, amazon.com seems to be getting better at shipping to India. I have been getting stuff regularly from them and notice their shipping rates seem to be dropping. Problem is that they still do not ship many items to India such as router bits.

    ReplyDelete

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