Amazon is set to launch its first cross-border trade, or CBT, service here, which will enable small sellers in India to reach out to global customers, according to people familiar with the plans. The initiative could well become one of the most significant trump cards for the world's largest online merchant as Alibaba flexes its financial muscle after the initial public offering.
For instance, through Amazon's FBA (Fulfillment By Amazon) programme in the US, sellers sell their products in international markets by paying a small fee. In 2013, an estimated $4.4 billion of Amazon's $74.5 billion in sales came from its FBA sellers, according to a Citi report. Now, Jeff Bezos-led e-tailer is trying to get more international sellers under its umbrella in other markets.
Asked about its impending initiative, an Amazon India spokesperson said: "We are committed to enable Indian SMEs to grow profitably in the new digital age and we remain focused on exploring opportunities to provide them fast, easy and convenient access to both domestic as well as global markets."
"Even Alibaba, which allows Indian sellers to sell their products in countries like China, has tasted huge success through this model," says Arvind Singhal, founder and chairman of retail consultancy firm Technopak. "Around 80-90% of Alibaba's revenues come from charging fees on these transactions, while only 10% comes from the e-tailer selling these products itself. Similarly, through a CBT programme, Amazon will be able to generate significant revenues by charging fees on each transaction from sellers here."
At present, while buyers in India can buy products from international sellers on Amazon India, sellers cannot sell their products in other countries through its website. EBay India, on the other hand, allows sellers to sell their products in around 201 countries through its CBT program. Out of the 50,000 sellers on eBay India, 15,000 sell items like gems, jewellery, ethnic clothing and home decor internationally.
According to sources, Amazon India has poached executives from rival companies, who are experts on CBT. Recent job listings by Amazon India on LinkedIn suggest the e-tailer is looking to hire people for its newly formed global selling team that will help grow its seller business around the world, with the India team focusing on helping Indian sellers list on other Amazon global marketplaces.
Amazon has poached executives from rival companies, who are experts on cross-border trade services. Ebay and Alibaba provide sellers access to overseas markets
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