A Presentation on Business Strategy of

BY

TIRTHANKAR SUTRADHAR

Introduction Amazon’s Indian subsidiary Amazon Wholesale India launched its pilot project in Bengaluru in April.

Replication of AmazonSupply model, which is a similar B2B platform for American SMBs and traders.

Dedicated 30,000 sq ft warehouse in the Bommasandra industrial area of Bengaluru.

Receives products directly from manufacturers and ships them to customers within two days after an order is placed online.

Maintains a separate centre for its B2C business at Hoskote on the outskirts of Bengaluru.

Problems looking to address

“Small and medium businesses suffered because of inefficiencies in the supplies procurement system.

Either the fill rates were poor, or the pricing was not transparent, or the delivery options were inconvenient

and vendor lead time was huge.”

- Amit AgarwalCountry headAmazon India

Features of AmazonBusiness.in A members-only B2B website.

Targeted audience: Small offices, entrepreneurs, department stores, kirana stores, drugstores, clinics, hospitals, hotels, and restaurants.

Invite only mode: Not open for all. Business owners and traders need to request an invite to be able to procure goods from this market place.

Minimum order which can be placed is Rs 1000.

Amazon will try to provision credit facility after collaborating with a financial firm,

Valid business license required to be eligible for becoming a member

Porter’s five forces analysis

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

Supplier Power• Many Suppliers in the

Indian Market

• Over 10,000 products from more than 100 Indian manufacturers

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

Buyer Power• 46 Million SMEs in India

• High degree of buyer power

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

Competitive Rivalry• Few competitors.

• Bestwholesaleprice.co.in

• Over the period of time, players like Alibaba and Tata will respond dynamically.

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

Threat of Substitution• Low threat of

substitution as of now.

CompetitorRivalry

Threat of new entry

Buyer Power

Threat of Substitution

Supplier Power

Threat of New Entry• Low Threat

• Expertise of Amazon and their network is tough to replicate.

SMEs in India and their potential Potential of $56 billion revenue and create 1.1 million new jobs, if internet and latest IT tools are adopted.

According to the government data, micro, small and medium enterprises employ about 59.7 million persons spread over 26.1 million enterprises.

In value terms, MSMEs accounts for about 45% of the manufacturing output and around 40% of the total export of the country.

About 90% of small and medium enterprises (SMEs) in India have no access to the Internet.

Nearly 90% of SMEs in India have no access to the Internet, compared with only 22% of SMEs in China and 5% of SMEs in the US.

At 48 million, India has the second largest number of SMEs in the world. China leads with 50 million.

Statewise SME spread in India

Strategies

Phase 1: Online B2B distribution in Metros. Awareness in Rural Areas. (6 months)

Phase 2: Online B2B distribution in Metros and Semi Urban cities. (6 months)

Phase 3: Online B2B distribution in Metros, Semi Urban cities and rural areas.