rebrands used-goods site, enters 3 new cities

19 Jul 2017

After quietly rolling out its ‘Sell as individual’ program in Bengaluru in January this year (reported by us first, we are proud to say), Amazon Inc. now took the next, purposeful step towards offering a Craigslist-like classified platform for used goods (with on-site payment) nationwide: The Sell as individual program was rebranded as Local Finds and rolled out in three new cities.

Local Finds pits Amazon India head-to-head against other big horizontal platform contenders, such as Kinnevik-backed Quikr (currently valued at $1.47 billion U.S.) and Naspers-backed OLX India.

While Sell as individual was only available in Bengaluru, Local Finds is available in four cities, namely Bengaluru, Mumbai, Chennai, and Hyderabad (as announced on the Amazon site) and may later be rolled out to 250, major cities in India (this was suggested in the FAQ section of the site).

Logo and pay-off line of the new used-goods platform

Although Local Finds is currently only available to web users (desktop site and mobile site), Amazon app users were also notified of the rebranded initiative last week. During his April visit to India, Amazon chief Jeff Bezos committed the company to spend at least $5 billion U.S. on growing the business in the country. Of this, nearly $2.5 billion has already been spent.

Despite repeated attempts, we were unable to get an official response from Amazon India to questions on their new Local Finds used-goods site.

At present, the booming refurbished goods market in the country is valued at nearly $15 billion U.S. annually, with used mobiles alone accounting for $3 billion U.S. (source: a Gartner study).

To test the platform, we tried to sell Booker Prize winner Arundharti Roy’s debut novel God of Small Things (1997), and Local Finds returned 27 already-listed items in paperback and hardcover, with prices ranging from Rs 100 to Rs 1,500 ($1.55 to $23.32 U.S.). Next we tried to sell ours, but the drop-down menu did not give us the choice of Mumbai. So, the site is still experiencing teething problems, which will, no doubt, be ironed out quickly.

The tagline on the home page of Local Finds reads: Buy from people in your area. (Which is why Amazon is rolling out slowly – city for city.)

There are ten product categories: books, mobiles, tablets, video games, mobile covers, movies, jewelry, clothing, and music. There are not very many listings (yet), and prices range from $1.55 (Rs 100) for mobile covers, to $77.72 (Rs 5,000) in the home category. In some categories, such as music and movies, there are no listings at all.

To post an ad is free for Local Find users. A transaction fee becomes payable only when the product is sold. For multiple listings, sellers have to post one after the other.

Amazon’s transaction fee is extremely low: 16 U.S. cents (Rs 10) for products priced below $15.54 U.S. (Rs 1,000); 78 cents (Rs 50) for products priced $15.54 to $77.72 (Rs 1,000 to Rs 5,000), and $1.55 (Rs 100) for products priced up from $77.72 (Rs 5,000).

The logistics (pick-up, pack and delivery of a used products) is taken care of by Amazon. Delivery is promised in seven business days. Buyers and sellers get to schedule the doorstep pick-up and delivery service with the Amazon executive.

If a product is damaged in transit, Amazon will refund the entire sales value to the seller. To incentivize users to list, first-time sellers are being offered $3.89 (Rs 250) cash back in two business days.

Amazon India is building a complete ecosystem around its new- and used-goods businesses. In May, its subsidiary Amazon Seller Services announced plans to double its storage capacity and add 14 new warehouses in tier-2 and tier-3 cities. Seven of them were recently opened to boost sales of large appliances and furniture. They are located in Telangana, Haryana, Maharashtra, Madhya Pradesh, Uttar Pradesh and Andhra Pradesh.

Already doing well in the new-goods business, the company reported an increase in unit sales of new goods by 124 percent in calendar year 2016. In the first quarter of this year, it registered another jump in unit sales of 85 percent from Q1 of 2016.

“We are seeing really strong growth here. We want to ensure that Indian customers can buy anything, anytime from anywhere in the country. With the additional capacity, we will serve more sellers better,” Akhil Saxena, vice president and head of supply chain at Amazon India, told Live Mint.

Today, Amazon has close to 140,000 sellers in India. Warehouses, fulfillment services, service-provider network, in-person support, and other services such as seller cafes and instant registration to its marketplace, are potential areas of investment.

So far, Amazon’s loyalty program Amazon Prime has been the main driver of growth in India. Less than a year after its launch, every third buy (new goods) is already from a Prime customer. In April this year, Amazon received a digital-wallet license from the central bank of India.

Thanks to the government’s Digital India campaign, the digital wallet Amazon Pay can be used for paying online on any internet site – another lucrative business line in India.

Sriram Jagannathan, a former Citibank executive, joined Amazon India in February 2016 as head of the payments business. “We recently launched Amazon Pay, where customers can fund their prepaid balance using internet banking and credit/debit card for smooth purchases and payments. We will continue to improve customer experience, and to increase digital payments by leveraging our PPI license,” Jagannathan told a journalist. (PPI is the acronym for pre-paid payment instrument.)

The online shopping market in India (new- and used-goods) is presently valued at $16 billion U.S. and Amazon’s direct competition comes from Naspers, Tencent and Microsoft-backed Flipkart (which raised $1.4 billion U.S. from existing investors in April at a $11.6 billion U.S. valuation). Flipkart also submitted a revised bid of $850 million U.S. to Snapdeal, an e-commerce site in India backed by Nexus Venture Partners and Kalaari Capital.

For context: Amazon’s global net sales rose 23 percent Q1-to-Q1 to $35.7 billion U.S., and net profit increased 41 percent to $724 million U.S.. This was the eighth straight quarter in which the company had posted a net profit.

Citing ComScore and SimilarWeb data, claims to be the most visited platform on the web (desktop and mobile sites combined, but not app use). It also quoted app analytics firm App Annie saying that Amazon was India’s No. 1 as measured by shopping app downloads.


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.