MSMEs alert! Amazon sets up first 'Digital Kendra' in Surat

Amazon India on Thursday launched its first 'Digital Kendra' in Surat, Gujarat, as part of its commitment to digitise 10 million Indian micro, small and medium enterprises by 2025.

Amazon Digital Kendras are brick and mortar resource centres that will provide MSMEs information about the benefits of e-commerce and help avail third-party services such as shipping and logistics support, cataloguing assistance, digital marketing services, GST and taxation support to start their digital journey.

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Speaking at the launch, Amazon India Senior VP and Country Head Amit Agarwal said e-commerce was mostly an urban phenomenon when the company had started its operations in the country in 2013.

"People would buy certain products on selected events, and it would not be common for people to pay for shipping...The seller base was new to digital, they didn't have the skills to go online yet and on the customer side, the majority were using mobile phones to access the internet for the first time, and transactions are primarily cash," he said.

The company has focused on enabling sellers to reach customers across India and globally, and has made significant investments in technology, logistics, delivery infrastructure and digitising payments that collectively helped more customers and businesses to come online, Agarwal added.

In January 2020, former Amazon CEO Jeff Bezos had announced a USD 1 billion (over Rs 7,000 crore) investment in India to help bring small and medium businesses online and committed to exporting USD 10 billion worth of India-made goods by 2025.

The investment, he had said, would also be utilised to digitise 10 million micro, small, and medium enterprises (MSMEs) and traders across India, including manufacturers, resellers, local offline shops, and brands. As part of this effort, Amazon was to establish 100 digital centres throughout India.

"The first of our Digital Kendras is launching at Surat. Amazon Digital Kendra brings a host of services in one single place to help MSMEs kickstart their journey as digital entrepreneurs," Agarwal said.

Amazon, which competes with players like Flipkart and Reliance Industries' JioMart, has been ramping up its efforts to expand the base of sellers on its marketplace.

Interestingly, fair trade watchdog CCI has initiated a probe on the basis of complaints alleging that Amazon and Flipkart promote select sellers on their marketplace platforms and that deep discounts have stifled competition.

Agarwal, during his address, noted that Gujarat is a manufacturing powerhouse for auto, auto components, textiles, gems, jewellery, ceramics and many other sectors and that Surat is one of the key MSME hubs in the state.

"So, we have set up the first Amazon Digital Kendra in one of the most important MSME clusters and will cater to thousands of MSMEs located in and around the city. The state has been a key geography for us and we have made significant investments in the state," he highlighted.

Amazon has three fulfilment centres with more than 1.5 million cubic feet of storage space, along with a strong delivery network of more than 100 Amazon-owned and delivery service partner stations across the state.

More than one lakh sellers from Gujarat, including artisans, weavers, local offline stores and other sellers, sell to customers in the country as well as other parts of the world.

Agarwal said by providing the right technology tools, the MSME sector will become an even stronger contributor to the economic growth of the country.

Gujarat Chief Minister Vijay Rupani said the initiative will help equip MSMEs with the right knowledge, skills and support to benefit from technology adoption and e-commerce.

He noted that economic activities have been impacted by the pandemic and that steps like these will be important as MSMEs look at reviving and rebuilding their businesses.

"We need to empower and enable MSMEs to play an even stronger role in the Indian economy going forward. I am happy that the first Amazon Digital Kendra has come up here in Surat, which is home to thousands of MSMEs and traders. I am sure they will be benefited by becoming digital entrepreneurs," he said.

The 1,400 sq ft centre has been set up at Krushi Bazar (APMC Market) and is located in an important MSME cluster.

Amazon India VP Manish Tiwary said over the last few years, there has been an uptick in sellers wanting to sell online, those looking at using digital forms of payment, and even exploring becoming a part of Amazon's global selling programme.

"The pandemic, the change in customer behaviour has further accelerated the rate of sellers coming on to Amazon.In...Amazon Digital Kendra is this brick and mortar resource, which we hope becomes a single point of contact to enable some of these MSMEs to go digital," he added.

Tiwary stated that from January 2020, close to 3,00,000 new sellers have joined Amazon.In to grow their business, especially during the pandemic as customers turned to e-commerce to shop while staying safe within their homes.

The executive pointed out that the pandemic had slowed down the rollout of the centre, but as the situation improved, the first centre was opened. He, however, declined to comment on details of new centres.

Tiwary explained that the company had set up Amazon Easy, a brick and mortar set up for customers a few years ago, to help them shop online.

The centre will play a role in creating greater awareness and understanding of e-commerce, understanding the export markets, and offer MSMEs the tools to grow their business, he added.

The centre will also provide the opportunity for MSMEs to avail onboarding services if they are interested in registering as sellers on Amazon.In or engaging with other Amazon programmes.

Last year, Amazon - at its inaugural Smbhav Summit - had announced three pledges of digitally enabling 10 million MSMEs, enabling e-commerce exports worth USD 10 billion and creating 1 million additional jobs in India between 2020 and 2025.