Amazon launches classified ads in India, maybe beyond

17 Jan 2017

MUMBAI — First there was Facebook Marketplace. Now another internet giant, Amazon, is moving in on classifieds.

Today, it’s a tiny program just getting started in Bengaluru, India. But Amazon told us it is “a global Amazon program” and the company is considering expansion.

In some ways, it’s not new. Amazon has offered a similar service on its wholly owned Indian domain, Junglee.com, since 2014. (We covered it in Classified Intelligence Report 14.21 way back in November 2014. And we’ve reported on it several times since.) But, now that it’s moved from Junglee to Amazon.in, it bears watching even more.

“‘Sell as Individual’ is a global Amazon program, and has been launched for Bengaluru customers at the moment,” Surabi Shetty of PR agency Weber Shandwick, a spokesperson for Amazon, told us by email. “Based on our learnings in Bengaluru, we will consider expansion to more cities.”

Stress-free? Or not?

“The experience … consists of a number of tools which are all self-service in nature, stress-free by design and designed to help [individuals] to sell their used items,” Shetty said. “The experience builds off learnings from similar programs Amazon has globally, and has been specifically customized for customers in India.”

But it wasn’t all “stress-free”, as we’ll note below.

The new listings compete directly with OLX.in, owned by Naspers, and Quikr.com, the horizontal Indian site (among others, of course). Both battle to be No. 1 in c-to-c “stuff” classifieds. Quikr has focused heavily on verticals — QuikrJobs, QuikrHomes, QuikrCars, QuikrServices — during the past two years, but also has a robust c-to-c category. It started offering door-to-door pickup and delivery of consumer sales more than 18 months ago.

The Amazon classifieds also compete with Flipkart and Snapdeal, two major e-commerce sites in India, and could even have an impact on — and be impacted by –– Facebook Marketplace, if and when it launches in India.

Unlike OLX and Quikr, which offer free stuff ads (with limitations), the Amazon service charges a fee on completion of a deal. Door-to-door pickup and delivery are included in the fee on Amazon / Junglee. Quikr’s ads are free, but it charges a fee for pickup and delivery.

Quikr declined comment on the Amazon moves, and OLX did not respond to our inquiry. Shetty, the Amazon spokesperson, declined to answer our questions about how Amazon peer-to-peer differs from OLX and Quikr, and how it expects to compete with OLX and Quikr in a price-sensitive market.

Amazon and Junglee platforms nearly identical

The Amazon “peer to peer” platform looks identical to the top of the “post your ad” page on Junglee.

The Amazon service has different dashboards for buying and selling, which can be confusing. The registration page for individual sellers is Amazon.in/p2p/, but to buy items users have to log in to the main Amazon.in site, which displays both new and used products.

The home page displays a few items under categories such as earrings, necklaces, bangles, dress materials, books and sarees. Only when you click on any of the items are you able to buy. If you select from the categories listed in the menu, the dashboard only prompts you to sell.

Users can post any number of listings. Fees are nominal: 10 rupees (15 cents U.S.) on items up to 1,000 rupees ($14.70 U.S.); 50 rupees for items priced between 1,000 to 5,000 rupees ($74 U.S.) and 100 rupees ($14.70) for items above 5,000 rupees. The site helps sellers estimate realistic prices for their used products. Until this Sunday, Amazon is offering bonuses for completed deals.

We tried it, and had mixed results

Selling was pretty easy in our test: Enter the item details, update bank account information and submit the ad. If a sale is made, Amazon picks up the item, delivers it to the buyer and pays the seller within about a week if the buyer accepts the item.

However, there are very few categories.

“If I want to sell a handbag, I do see a few listed … but there is no handbag option when I post my ad. I found it better to sell directly on Amazon.in — more options,” said Nanditha Vasudev, our “mystery shopper” in Bengaluru, who tested the service for us.

“The home page only directs people to sell as an individual and shows a few items under different categories such as earrings, necklaces, bangles, dress materials, books and sarees. Only when you click on any of these items will you be able to buy. If you select from the categories mentioned in the menu, it doesn’t let you buy — so I couldn’t [try to] buy a baby pram. Nothing happened after clicking; it only asked me to sell mine.”

From Mumbai, I ran into problems. When I tried to “sell” my phone and hit the submit button, the message flashed “Your ad could not be posted from this account. Please use a different account to post.” (I pretended to be located in Bengaluru, since I’m in Mumbai. I thought that might be the issue.) But Amazon said that perhaps I had already registered as a professional seller on Amazon. (I had not.) They suggested I try with a different ID.

Shetty told us Amazon plans to limit sales to individuals. “We have mechanisms in place to nudge professional sellers who might have opted for the ‘sell by individual’ option by mistake” — what a delicate and polite way to put that! — “to sign up as a professional seller on Amazon. We believe the needs for a … business are different from those of an individual seller trying to sell a few items locally and hence we have programs available for both the target groups.”

There is no limit on the number of listings, she said. OLX and Quikr both limit the number of free listings users can post each month, depending on category.

A major investment in India

Amazon has made major investments in India — an estimated $2 billion U.S. during the past couple of years, and $5 billion U.S. overall, including the opening of six fulfillment centers. In August, it launched a used-book section on Amazon.in that was clearly a precursor to more secondhand sales.

Amazon has been aggressively challenging Flipkart, the 10-year-old e-commerce site based in Bengaluru, and Snapdeal, another major e-commerce company in India.

Flipkart has taken in more than $3 billion U.S. in investments during its lifespan, including $1.4 billion in December 2014 and June 2015. In that December investment, it was valued at $11 billion.

Major investors in Flipkart, which also owns the fashion e-commerce site Myntra, include Naspers, Tiger Global Management, Steadview Capital and Accel Partners. (Crunchbase has the full list.) At Flipkart this week, Kalyan Krishnamurthy was promoted to CEO and co-founder Binny Binsal, who had been CEO, was moved to a new role as group CEO overseeing Flipkart, Myntra, Jabong and its payment unit PhonePe.

Snapdeal, based in New Delhi and launched in 2000, is also threatened by Amazon’s moves. Snapdeal has taken in $1.8 billion in investments from major companies including SoftBank, Alibaba, the Japanese holding company Recruit Co. Ltd., Bessemer Venture Partners and EBay. (Again, here’s the Crunchbase detail.)

Goldman Sachs projects the c-to-c sales business in India is worth $36 billion this year. So it’s a big market — and maybe has enough size for two or three companies to be successful.

Amit Agarwal, who heads Amazon-India, told the Economic Times last month that the company “will demonstrate massive scale in 2017” with investments in technology, infrastructure and innovation.

“(Amazon) has become the leader in all the things that matter to customers,” he said.

“For Amazon, India is one of the highest priority investments,” he told TechCircle. “We continue to look at India as a growth region and are committed to investing aggressively in building a great customer and seller experience.”

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Radhika Sachdev

Radhika Sachdev is a journalist who has held senior editorial positions with major Indian newspaper banners. She has over 20 years of experience in the profession, covering Advertising, Marketing, Media, Education, HR, Real Estate and Environment beats. She is also a partner and chief content developer for Write Solutions, a boutique content house she founded eight years ago, signifying her diversification from journalism to copywriting and media consultancy.