NEW DELHI - Amazon founder and Chief Executive Officer Jeff Bezos announced a $1 billion investment in India on Wednesday, calling the South Asian country a key growth market. The announcement comes as hundreds of small traders protest against the world’s biggest online retailer, saying Amazon's business practices are hurting local stores.
"I predict that the 21st century is going to be India’s century,” Bezos, dressed in a blue traditional Indian jacket, said at a company event that brought together small businesses in the Indian capital.
The company said the latest investment would help bring more than 10 million Indian businesses online as it sets up digital centers in 100 villages and towns It will also aim to export goods worth $10 billion from India by 2025.
Amazon says the initiative aims at empowering small businesses and that it already works with more than half a million sellers on its platform.
The announcement however failed to convince protesting traders who held demonstrations holding posters saying “Jeff Bezos Go Back.” More such protests are planned on Thursday.
"They [online companies] are indulging into predatory pricing, deep discounting which has resulted in great damage to brick and mortar businesses due to the business designs of companies with deep pockets,” according to Praveen Khandelwal, the head of the Confederation of All India Traders, which represents tens of millions of small traders. Accusing the company of discriminating against small sellers by promoting larger ones, Khandelwal added, “they have done nothing to empower small traders.”
On Monday, India’s anti-trust regulator opened an investigation into the business practices of Amazon and its Indian competitor Walmart-owned Flipkart, looking into allegations of deep discounting and preferential treatment of some sellers on their platforms.
Amazon has said in a statement it was "confident in our compliance” and welcomes the opportunity to address allegations made against the company.
Small neighborhood stores, which still dominate India’s retail landscape, feel increasingly threatened as millions of Indians log onto websites and shop online helped by the rapid expansion of smart phones and cheap data in recent years. Local businesses are demanding Amazon and other online retailers comply with new guidelines that forbid heavy discounting and exclusive online-only deals.
Retailers have long eyed India, one of the world’s biggest retail markets. But tough regulations that are in place largely due to strong opposition from small traders have made it difficult for foreign companies such as Walmart to open brick and mortar stores in the country.
However online retailers have been able to access Indian consumers as millions of people come online. The country’s e-commerce market is growing rapidly and projected to be worth around $200 billion by 2027.
Amazon has invested billions of dollars in India in recent years and opened its biggest office building in the world in the southern city of Hyderabad last August, as the country of 1.3 billion people becomes one of its fastest growing markets.