Amazon Acquires Its First Social Commerce Startup In India
GlowRoad, a women-focused social commerce company, was acquired by Amazon India on April 22. This is Amazon’s first investment in India to expand its social commerce sector.
Several media sources stated that GlowRoad was valued at $75 million in this agreement, albeit the transactional details have not been published.
According to TechCrunch and the Economic Times claims, Amazon paid cash for the company.
Amazon expects the move will aid in the company’s goal of digitising 10 million businesses by 2025.
“Amazon continues to look for innovative ways to digitally transform India and satisfy customers, micro-entrepreneurs, and sellers, and bringing GlowRoad on board is a significant step in that regard.” Amazon and GlowRoad will work together to help millions of creators, homemakers, students, and small business owners around the country become more entrepreneurial. “Amazon’s technology, infrastructure, and digital payments capabilities will enhance GlowRoad’s already popular service, offering everyone more efficiency and cost savings,” an Amazon representative told Business Insider.
Sonal Verma, Kunal Sinha, Nitesh Pant, Shekhar Sahu, and Nilesh Padariya established GlowRoad in 2017. The company’s founders collectively owned about half of the company’s stock. Verma and Sinha possessed a higher share than the others among the other founders.
To date, Korea Investment Partners, Vertex Ventures, CDH Investments, and RB Investments have contributed about $31 million to the company. According to business information platform Tracxn, Accel is the company’s largest shareholder, with a nearly 19 per cent stake.
The five-year-old firm raised $7 million in its most recent round in November 2020.
GlowRoad is a social commerce platform that allows suppliers to sell their items to end customers via resellers in over 20,000 pin codes across 2,000 locations. Resellers, who are often housewives, temporary workers, or students, help the company target Tier II and III markets.
According to the company’s website, a reseller who sells close to 100 products each month can earn up to 20,000 per month. The platform claims to have over 6 million resellers.
DealShare, CityMall, and YouTube-owned SimSim are competitors. Meesho was in the segment as well, but the company switched to a full-fledged e-commerce platform.
About Amazon
Amazon, Inc. is e-commerce, cloud computing, digital streaming, and artificial intelligence-focused American multinational technology firm. It has been described as “one of the world’s most powerful economic and cultural forces” and one of the most valuable brands. Along with Alphabet, Apple, Meta, and Microsoft, it is one of the Big Five American information technology corporations.
On July 5, 1994, Jeff Bezos launched Amazon from his garage in Bellevue, Washington. It started as an online bookstore but has now expanded to include a wide range of products, earning it the moniker “The Everything Store.” Amazon Web Services (cloud computing), Zoox (autonomous vehicles), Kuiper Systems (satellite Internet), and Amazon Lab126 are among its subsidiaries (computer hardware R&D). Ring, Twitch, Freevee, and Whole Foods Market are among its other subsidiaries. Its acquisition of Whole Foods for $13.4 billion in August 2017 significantly enlarged its physical retail footprint.
The company has earned a reputation as a disruptor of well-established industries thanks to its technological innovation and massive size. It is the world’s largest online retailer and marketplace, smart speaker supplier, cloud computing service provider through AWS, live-streaming service provider through Twitch, and Internet firm as of 2021, according to revenue and market share. Outside of China, it will overtake Walmart as the world’s largest retailer in 2021, thanks in part to Amazon Prime, a monthly subscription programme with over 200 million members worldwide. It is the second-largest private employer in the United States.
Amazon’s Amazon Prime Video, Music, Twitch, and Audible businesses all distribute a variety of digital and streaming entertainment. It publishes books through Amazon Publishing, produces film and television content through Amazon Studios, and has owned Metro-Goldwyn-Mayer since March 2022. It also makes consumer products, including Kindle e-readers, Echo devices, Fire tablets, and Fire TVs.
Customer data gathering techniques, a toxic work atmosphere, tax avoidance, and anti-competitive activity have all been blamed on Amazon.
History
Amazon was started in July 1994 by Jeff Bezos, who chose Seattle because of the amount of technical expertise and because Microsoft was located nearby. Mackenzie Scott was also a key figure in the company’s creation, having driven across the country with Bezos to get it started. After graduation, Scott applied for a research associate position at D. E. Shaw & Co., a quantitative hedge fund in New York City, to “pay the bills while working on her novels.” When Bezos, then a vice president of the company, interviewed her, he met her.
In May 1997, Amazon went public. It started selling music and films in 1998 and expanded internationally by acquiring online book vendors in the UK and Germany. The following year, it began offering video games, consumer electronics, home improvement items, software, games, and toys.
It established AWS in 2002, which supplied marketers and developers with data on website popularity, Internet traffic patterns, and other statistics. Elastic Compute Cloud (EC2), which rented computer processing power, and Simple Storage Service (S3), which rented data storage via the Internet, was added to the AWS portfolio in 2006. In the same year, Amazon launched Fulfillment by Amazon, allowing individuals and small businesses to sell things on the company’s website. Amazon purchased Kiva Systems in 2012 to automate its inventory management operation. In 2017, it bought the Whole Foods Market grocery business.
On February 2, 2021, Amazon stated that Jeff Bezos would step down as CEO and become executive chair of the board of directors in Q3 of 2021. Andy Jassy, the former CEO of AWS, was named CEO of the company.
Merchant partnerships
Toys “R” Us signed a 10-year deal with Amazon in 2000, worth $50 million per year plus a percentage of sales, under which Toys “R” Us would be the service’s sole supplier of toys and baby products, and the chain’s website would redirect to Amazon’s Toys & Games category. Toys “R” Us sued Amazon in 2004, alleging that Amazon had deliberately permitted third-party sellers to sell items on the service in categories where Toys “R” Us had been awarded exclusivity due to a perceived lack of diversity in Toys “R” Us merchandise.
In 2006, a judge found in Toys “R” Us’ favour, allowing it to terminate its arrangement with Amazon and launch its own e-commerce site. Damages of $51 million were later granted to the corporation.
Amazon and Borders Group signed a similar agreement in 2001, under which it would administer Borders.com as a co-branded business. Borders pulled out of the deal in 2007, announcing plans to open its own online store.
Amazon and DC Books announced a collaboration on October 18, 2011, for the exclusive digital rights to a number of popular comics, including Superman, Batman, Green Lantern, The Sandman, and Watchmen. Because of the arrangement, well-known bookshops like Barnes & Noble have taken certain items from their shelves.
Amazon established a cooperation with the US Postal Service in November 2013 to begin delivering orders on Sundays. The service included in Amazon’s standard shipping costs started in the Los Angeles and New York metropolitan areas due to high volume and inability to deliver on time, with plans to extend to Dallas, Houston, New Orleans, and Phoenix by 2014.
Nike agreed to sell products through Amazon in June 2017 in return for more robust counterfeit goods monitoring. This was ineffective, and Nike ended the collaboration in November 2019. Around the same time, companies like Ikea and Birkenstock ceased selling on Amazon, citing similar concerns about business methods and counterfeit items.
In September 2017, it formed a joint venture with one of its vendors, Patni Group’s JV Appario Retail, which earned US$ 104.44 million (759 crore) in the fiscal year 2017–2018.
AmazonFresh sold a variety of Booths branded products for home delivery in some areas on October 11, 2017.
In November 2018, Amazon and Apple Inc. agreed to sell a limited number of products through the service and Apple Authorized Resellers. As a result of this arrangement, beginning January 4, 2019, only Apple Authorised Resellers will be able to sell Apple products on Amazon.
Logistics
Amazon uses a variety of delivery firms to deliver packages.
• Amazon Air, a cargo airline for bulk shipments, with last-mile delivery handled by Amazon Flex, Logistics, or the US Postal Service.
• Amazon Flex is a smartphone programme that allows people to work as independent contractors and deliver products to consumers without wearing uniforms. Prime Now, same-day or next-day Amazon Fresh groceries, ordinary Amazon.com orders, and those from local stores with Amazon contracts are all available for delivery.
• Amazon Logistics, which enlists the help of small businesses (dubbed “Delivery Service Partners”) to make deliveries to clients. Each company has a fleet of about 20–40 Amazon-branded vehicles, and the contractors’ personnel wear Amazon uniforms. It will be operational in the United States, Canada, Italy, Germany, Spain, and the United Kingdom by December 2020.
• Amazon Prime Air is a test programme for drone delivery.
Amazon employs employees directly at its warehouses, bulk distribution facilities, staffed “Amazon Hub Locker+” sites, and delivery stations where goods are picked up. It will no longer be hiring delivery drivers as of December 2020.
According to Rakuten Intelligence, Amazon’s directly contracted services will account for 56 per cent of last-mile deliveries in the United States in 2020 (mainly in metropolitan areas) and 30 per cent for the US Postal Service (primarily in rural regions), and 14 per cent for UPS. Amazon disclosed to investors in April 2021 that it had grown its in-house delivery capacity by 50% in the previous 12 months (which included the first year of the COVID-19 pandemic in the United States).
Products and services
Several media (books, DVDs, music CDs, videotapes, and software) are available on Amazon.com, as well as apparel, baby products, consumer electronics, gourmet food, groceries, health and personal-care items, industrial & scientific supplies, kitchen items, jewellery, watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items, and toys & games.
Amazon requested a liquor store in San Francisco, CA, in August 2019 to ship beer and alcohol within the city. Certain nations have their own Amazon retail websites, and some of it’s products are available for an international shipment to other countries. The firm launched an online prescription medicine delivery service in November 2020. Prime subscribers receive discounts of up to 80% on generic pharmaceuticals and up to 40% on branded drugs. The products are available for purchase on the company’s website or at over 50,000 pharmacies across the United States.
According to tech investor Gene Munster, India might contribute up to 20% of Amazon’s growth in the next five years.
India is now a minor contribution to Amazon’s total sales, but the country could become a key growth driver for the US e-commerce giant.
On Sunday, Amazon won an injunction from a Singapore arbitration to prevent a comprehensive agreement between two major Indian retailers, Future Retail and Reliance Industries.
According to Reuters, Future Retail, a subsidiary of Future Group, announced in August that it will sell its retail, wholesale, and logistics businesses to Reliance for $3.38 billion, including debt. According to the news agency, Amazon has filed a lawsuit against Future Retail, alleging that the Indian retailer violated contractual conditions agreed to in a separate agreement with the tech giant.
Reliance, which is owned by Mukesh Ambani, India’s richest man, has been making inroads into India’s massive e-commerce market, which Amazon and Walmart-owned Flipkart now dominate.
Amazon is expanding its footprint in India. The e-commerce behemoth has poured billions of dollars into the South Asian country.
Munster, the founder and managing partner of Loup Ventures, told CNBC’s “Squawk Box Asia” on Tuesday, “When you look about Amazon, and their growth profile, (they) just had wicked growth in the last six months.”
“However, if you consider a normalised growth profile and the influence of India, this may be 15% to 20% of its growth over the next five years — India could be,” he said.
According to the investor, as a result of the Reliance-Future agreement, Amazon saw “a part of their opportunity – a massive growth engine – parts of that window starting to close,” according to the investor.
Bottom of Form
Amazon has pledged at least $6 billion in investments in India, including a $1 billion pledge in January to aid India’s small enterprises. By 2025, the digital giant intends to export $10 billion in Indian goods around the world.
However, the corporation faces regulatory challenges in India, including antitrust investigations.
Reuters stated that the Singapore arbitrator’s injunction was not automatically enforceable in India and that the order would have to be validated by an Indian court.
In a statement, Reliance said it “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future (Group) as soon as possible.”
According to Munster, Reliance could win the Amazon battle because it has more political clout in India. He explained that the final verdict is unlikely to impact Amazon’s stock price because investors do not give the Indian market enough credit because it currently adds relatively little to the e-commerce company’s overall sales.
“I believe the easy answer from investors will be, ‘disappointment, but it’s only 3% of revenue.’ “However, I believe it misses the larger point: to be successful in e-commerce in India, a U.S. company must cooperate, especially given some of the local rules,” Munster added.
5 Best-Kept Secrets of Amazon’s Incredible Success in India
The spectacular rise of Amazon India in recent years can be credited in part to its technological advancements. It’s no surprise that Amazon is investing more than USD 600 million (Rs 4400 crore) in its India operations, including food retail and marketplaces. It will give Amazon India greater resources to compete with arch-rivals Snapdeal and Flipkart.
Amazon has quickly established itself as India’s biggest online retailer in a highly complex sector. Amazon’s phenomenal success in this challenging sector demonstrates that it understands how to win in underdeveloped markets around the world.
Let’s take a look at some of Amazon India’s creative approaches to capturing the local market.
5 Steps behind Amazon’s Success in India
1. Understanding the Customers
Before launching its online marketplace in India, Amazon conducted an extensive study on the Indian consumer market. They invested a significant amount of time, money, and resources in gaining a comprehensive understanding of what most Indians search for while shopping online. One of the difficulties was a lack of knowledge of how to determine the quality of any product purchased online.
The majority of consumers in rural areas were unaware of customer reviews. To assist shoppers in making an informed decision, Amazon India developed their unique ‘assisted buying’ service at local retail locations.
2. Use of artificial intelligence
Most online shops still struggle to deliver products to the correct area. Amazon India has used cutting-edge technology like artificial intelligence (AI) and machine learning in its operations to tackle this predicament. The application of these technologies has resulted in extremely precise deliveries.
3. Ease of Use
Amazon India provides its merchants and customers with a simple way to track their orders. As a result, Amazon merchants can focus on their primary business while Amazon handles the rest. An intuitive dashboard, for example, gives sellers a rapid overview of all orders, their status, Easy send service, and FBA options, among other things. Amazon Indian handles everything for you, from picking items from your location to delivering them directly to clients, all without much effort on your part.
4. Research and Development using Local Knowledge
Bangalore is home to one of Amazon’s largest research and development centres. It demonstrates Amazon’s continuous dedication to fully comprehending the complexities of the Indian market and creating a perfect shopping experience tailored to Indian consumers.
5. Logistics and delivery
Amazon has beefed up its logistics and delivery network just in time for this year’s Great Festival Sale. Amazon India now has 1400 delivery stations spread over 750 Indian cities. In addition, Amazon has launched its ambitious “I Have Space” (IHF) programme in collaboration with local Kirana stores in over 350 Indian locations. This strategy has allowed them to expand their reach in local marketplaces.
The 2019 Amazon Great Indian Festival sale officially ended, raking in record income for the e-commerce behemoth. Cloudtail, Amazon’s single-largest seller, increased its sales by 25% in FY19. The probable entry of large eCommerce firms like Reliance in 2020, on the other hand, could serve as a litmus test for Amazon India and other existing players.
About GlowRoad
GlowRoad is a social selling platform that allows Indian women and small companies to earn money. The mobile app allows online shops and small businesses to make money by marketing specific items and services through their online and offline social networks. GlowRoad, which was founded in 2017, links over 6 lakh resellers in 2,000 cities.
The e-commerce platform gives customers access to a virtual store with millions of products and payment and shipping options, making it easier to launch an online business. Users can make money by selling these things to their friends and family. Accel, CDH Investments, Vertex Ventures, and Korea Investment Partners have all invested in GlowRoad.
GlowRoad’s Story: A Home-Based Business for Women
GlowRoad, an Indian e-commerce company, started with a simple idea. Connecting producers with resellers and leveraging dropshipping keep everyone’s overhead expenses low. On the other hand, the Bangalore-based business isn’t just interested in being an online reseller network. The goal of GlowRoad, which a former physician started, is to give stay-at-home mothers and homemakers a low-risk method to create their own retail companies from home.
GlowRoad is a social selling platform where Indian women and small companies may make money. The smartphone app allows online retailers and small companies to profit from marketing certain items and services via their online and offline social networks.
GlowRoad, like Meesho and Shop101, is a C2C (customer-to-customer) reseller network geared toward women. Sonal Verma bought the website, which was previously known as LocalQueen.com, in July 2017 and renamed it GlowRoad.
How does GlowRoad Work?
Simply register as a reseller on the website, select what you wish to sell or believe you can sell, and then contact the supplier to express your interest.
You can start marketing the products to your network through messaging applications like WhatsApp or social media platforms like Facebook once the supplier has approved and confirmed your request.
GlowRoad would deliver the merchandise, collect the money, and deposit the earnings into your bank account if someone orders through the shared link. The reseller makes money from home by selling things purchased from vendors through their networks.
Information
Name – Society Enterprise Private Limited
Headquarters – Bangalore, Karnataka, India
Founding Year – 2017
No. Of employees – 151-250
Founders
Five core members found GlowRoad –
Sonal Verma – founder
Kunal Sinha – co-founder and CEO
Nitesh pant – co-founder
Shekhar Sahu – co-founder
Nilesh Paradiya
Funding
Despite being a newcomer to the industry, GlowRoad was able to secure funds from investors. GlowRoad received seed investment from the following companies:
Vertex ventures
RB Investments Pte. Ltd.
Accel
CDH investments
Korea investment partners
GlowRoad Challenges
Safety of Resellers
Women are susceptible to unsolicited calls and texts from strangers due to social media marketing. GlowRoad suppliers, on the other hand, are vetted, and the site is only open to female resellers, which helps to prevent misuse.
No Control Over Quality
One major problem identified by GlowRoad is doing quality control on vendors and ensuring that they are adequately reimbursed. “Getting manufacturers to ship lesser quantities is one of our key goals.” The quantity of returns and complaints highlights the problem regions. On the other hand, quality management needs the employment of a human eye, for which we are aiming to hire more experts.”
Reseller Profits
Will GlowRoad’s resellers get the greatest deals, despite vendors being experts at selling their products? “We want our resellers to feel ecstatic about the prospect of working from home while also knowing that they’re part of a skilled network.”
GlowRoad Business Model
Sonal Verma, the founder, characterises it as “LinkedIn for female businesses,” with premium sellers paying a monthly charge of Rs 500 and resellers marketing the goods to their social circle for free. The profit margins on sales help resellers. They expect the company to break even in the coming months.
A tiny team of 20 employees covers everything from customer service to administration. According to the author, there are seldom disagreements, save in circumstances of complete non-delivery of goods (in which case customers are refunded).
GlowRoad’s payment gateway is available, but consumers can also finish the transaction via direct transfer or any other means. Resellers have the freedom to choose their payment method because most of their consumers are from a small social group. You can’t resell through a site reseller, however. The majority of the resellers are women.
Opportunities
A vast percentage of women in India must stay at home and care for their families. They have no justification for not working for themselves and being financially self-sufficient. “We assist develop a network of supplier-resellers to help women launch enterprises from the comfort of their own homes,” Sonal Verma explained. Although all firms, regardless of gender, are welcome to join the supplier channel, the creators have created a women-only reseller network to ensure a safe working environment.
Unlike Amway or Tupperware, the strategy focuses on women building a peer network of clients, but it does not sell exclusive products. It was founded by a group of IIT and IIM graduates around a year ago and was acquired by Verma earlier this year. Healthcaremagic.com, a telemedicine startup that a US firm developed, was co-founded by her.
They initially promoted themselves mainly through Facebook updates, with very little advertising. They began experimenting with search engine optimisation to enhance foot traffic once they had any. GlowRoad has around 12,000 daily users right now.
GlowRoad – Future Plan
Most of the funding will be used for internet marketing and recruiting by GlowRoad. “Our major accomplishment will be reaching 100,000 resellers within a year,” Sonal Verma adds.
To make the distribution process more accessible, they want to increase logistics and networking. “We’ll have accomplished something when GlowRoad generates at least 25% of our suppliers’ sales,” Sonal Verma remarked.
edited and profile nikita sharma
