People Matters Logo

Rural Employability Strategy of Amazon

• By Ruma Batheja
Rural Employability Strategy of Amazon

Indian e-commerce market leader has been innovative in capturing sales from all corners. Aggressively setting on its voyage of adding numerous seller categories; the range on offer has significantly surpassed more than 160 million in Amazon. Perhaps, the company has been quite innovative in a number of ways and the recent one in offering is prime delivery to subscription-based discount model for repeat purchases. 

The company intends to capture maximum share of offline sales and convert it to online sales by tapping the untouched rural arena. In such a thrust of sales expansion strategies, Amazon has been successful in generating many employment opportunities for rural sector in last few years. Let us look at some of their differently planned initiatives:

1. Project Udaan 

  • Amazon partnered with local retailers in village like kirana store, medical store, mobile shops and local entrepreneurs to make them a retail point.
  • They are being provided basic training to help local customers in finding products of their choice and in completing orders. 
  • Amazon had partnered with over 6,000 stores in 21 states until September 2017.

    • 2. Chai Cart

  • Amazon introduced this initiative to educated small business owners on online selling opportunity. 
  • Business owners are made aware of the benefits of online sales over a cup of tea or juice from these mobile tea carts. 
  • Navigating on city streets, the cart has travelled more than 15,000 km across 31 cities/smaller towns and engaged over 10,000 sellers.

    • 3. Seller Cafes

  • It provides on-ground support channel for sellers to set-up Amazon seller accounts and to receive basic guidance. 
  • Amazon has initially opened 24 such cafes across villages and planned to set-up 45 more cafes during Sep-Oct 2017 with focus on smaller towns. 

    • 4. IndiaBuys 

  • Amazon partnered with an ecommerce assistance platform IndiaBuys which helps rural people in buying on Amazon. 
  • This created employment opportunity for the entrepreneurs running each franchise of IndiaBuys in the rural area. 
  • IndiaBuys was founded in June 2017 and the first store was set up in Rajahmundry, followed by Tenali and Karimnagar. 
  • IndiaBuys currently has over 125 stores across Andhra Pradesh and Telangana.

    • 5. Partnering with ‘Mom-and-Pop’ stores

  • Local mom-and-pop stores are being used by people in small villages and remote areas for using Internet connection to browse and select goods from Amazon. 
  • The store owners are delegated the work to record their orders, inform customers when their products are delivered to the store, get the  payment done and pass along the amount excluding a handling fee to Amazon. 

    • At the same time, the company has been pumping money to create an infrastructure to deliver much more effectively in the rural areas by tying up with post offices and courier companies in addition to setting-up its own infrastructure in various towns. 

    Amazon Transportation Services (ATS), the captive logistics arm of Amazon India, has created a network of 225 hubs run by delivery-service partners to run the last-mile delivery hubs in metros and tier-II and -III cities and manage the peak loads. It has also signed up 12,500 kirana stores under the ‘I Have Space’ programme enrolling the stores as pickup and last-mile delivery hubs.

    India has humungous number of small-scale suppliers, unlike the U.S. where there are large-scale suppliers. And Amazon strategizes on the ubiquitous presence of mobile phones and an emerging middle class in India. They feel that more competition will energize the ecommerce sector to continue to innovate. 

    The company has plans to further scale up initiatives in this segment as the growth is expected to spur mainly from the Tier II and Tier III cities. Amazon has created a big pool of opportunities for entrepreneurs, small and medium businesses operating from remote locations in rural areas to expand their sales market place by going online and increasing the customer base resulting in huge profit margins. The mindset of rural India towards ecommerce and online product purchases is also changing at the rapid pace along with the uptake of internet services in the villages. People are more willing to take-up internet related-jobs in rural areas as compared to a decade ago. In the years ahead, it will be interesting to see how the landscape transforms or evolves further with more competitors trying to adopt similar models to boost sales penetration in rural areas.