E-commerce giant Amazon is determined to capitalize on the world’s fastest growing market for internet users: India. In the last month alone, Amazon has introduced a number of big developments in India, targeted at capturing and growing its existing database as well as encouraging subscription to Amazon Prime.
Despite the major moves Amazon has made in India over the past year, owner Jeff Bezos has faced some push-back from the local government. Regardless, Bezos remains undeterred, having built Amazon’s largest ever offices in India’s Silicon Valley, Hyderabad, only last year. The offices span 1.8 million square feet, with the total campus area reportedly equaling 65 football fields.
This year, Amazon India added insurance and gold to its financial service offering - as well as Amazon Pharmacy. Focusing on online payments and financial services is a strategy for the online retailer to increase profitability should it succeed in converting the predominantly cash-based economy to its offerings.
In India, an estimated 190 million adults do not own bank accounts. To this end, Amazon Pay, the digital wallet, was launched in 2016 and is now offering a credit card signed up to a state-backed payments network. Users can process payments for utility bills, telephone usage, travel, and entertainment with this card. Amazon even offers insurance, bringing this to market in July with gold investment products in August.
With over 100 million registered users in India, Amazon’s plan is to make Amazon Pay the country’s primary payment method, shares Mahendra Nerurkar, Head of Amazon Pay in India. This ambitious goal will be quite the undertaking given India’s famously complex market. Additionally, the company has the hurdle of winning over local merchants who are not inclined to support their biggest international rival.
That said, the success of Amazon Pay in India looks promising given the ready adoption of some of its services. During COVID-19, Amazon Prime was listed as the second most popular streaming service in the country. With India’s digital payments market projected to at least double in value to $135 billion in 2023, entrance into this market may prove to be extremely profitable for Amazon.
