Amazon has recently been mulling over the decision to go offline and sell its products through brick-and-mortar stores in the country. With regard to the same, it has now asked retailers to sell its ‘online-only’ exclusive smartphone via their offline stores, reports ETtech. This move from the company comes in effect post the recent demonetisation drive, which has led to a significant drop in smartphone distribution over the last month.
Due to the same, Amazon is now stepping the foot on the gas to test an offline sales strategy for clearing the stocks. If the said trial works out then the company plans to make offline distribution a dedicated part of their India operations strategy and work on further expansion of the same. It currently has exclusive partnerships with several global as well as Indian brands across product categories such as TVs, appliances, apparel and accessories, shoes and baby products.
Commenting on the same, an anonymous CEO of a global smartphone brand that sells exclusively on Amazon, says,
Smartphone sales were down by almost 40% in November and 20% in December compared with the same period a year ago. It is no different in e-commerce. Hence, Amazon quickly forayed into offline distribution to clear its inventory and boost sales.
Another anonymous executive from a leading smartphone brand says,
Amazon has plans to invest significantly to expand its offline distribution. For the online-exclusive brands, it’s a winning proposition since they don’t have to spend much money on creating infrastructure for warehousing and offline distribution and yet get immediate sales.
The offline distribution project has been courted by the company’s cash-and-carry affiliate Amazon Wholesale India. The said company has already started approaching offline retailers for setting up an initial network of smartphone sellers in Pune, Nasik and the NCR region of the country. It has contacted prominent smartphone sellers including OnePlus and Coolpad to make their smartphones available to customers through offline retailers. It will most likely still be able to secure a margin of 3 to 4 percent.
An Amazon spokesperson didn’t comment on the offline sales strategy but only shed light on the core working of the Wholesale arm of the company. In a statement, he said,
Amazon Wholesale is focused on providing small businesses a purpose-built shopping experience on amazonbusiness.in website where they can purchase thousands of items, including mobile phones, consumables, office supplies, home & kitchen and medical supplies at wholesale prices in bulk quantities
Venturing into the offline space, the company will currently test out numerous models and strategies to court more buyers for its exclusive smartphones. But it will soon come up with a proper policy to streamline the acquisition and sale of products through offline retailers, so the business doesn’t feel clunky and only builds on the initial success. Amazon might also look to expand the said services pan-India if the model works out in its favor.
