Amazon Launches Its First Shopping Website in India

23 June, 2013

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From VOA Learning English, this is the Technology Report.

The world's largest online retailer company, Amazon has launched its first shopping website in India. The company hopes to make use of India's economic growth to expand its online business.

The amazon website in India offers seven million books and 12,000 movies and television programs. It plans to add more products in the coming weeks. The American company will not sell its own products in India, Indian laws ban companies that carry goods from more than one manufacture from selling directly to people on the Internet. Instead the amazon website serves as a marketplace for local businesses.

Shabori Das is with the market research company Euromonitor. She predicts the online shopping in India will experience a yearly growth of nearly 17 percent in the next five years.

"This makes India among the top 20 fastest growing Internet retailing markets in the world."

Online businesses are looking at India's huge young population, many of home live in cities. Only about 12 percent of Indians have connection to the Internet -- much less than in countries like China.

But with 150 million Internet users in India, its market is still the third largest in the world. And it is expected to grow greatly as more people get connected. These growing numbers have made business leaders hope for that online shopping in India will become a bigger part of total sells. Among them is Kunal Bahl of snapdeal.com.

"Right now, in India about point two to point five percent of total deal is basically happening digitally. However in developed markets like the U.S. that number is 10 percent. So we have head room to grow from point two to going up to at least 10 percent and even further because India does not have the kind of offline retail penetration that a country like America would have."

He notes that infrastructure issues like transportation can make it hard for retail businesses to succeed in large cities, and many products are just not available in smaller towns.

"Indian cities don't have like one downtown, which is the case in most Western cities. We have maybe 25 downtowns in New Delhi. These cities are large and cumbersome to traverse for shoppers. In Tier one cities hence people see online shopping as being convenient, whereas in Tier 2 cities and beyond it is just giving them access to their aspiration.. to own good things in life but do not have access through offline retail."

However the path to big profits may not be easy for online retail businesses. Online retail adds up to to $10 billion at present, but a large amount is for air travel.

Shabori Das at Euromonitor says most online stores are struggling to earn money. She says the competition to increase sells is only going to get tougher with the entry of companies like Amazon.

And that's the Technology Report from VOA Learning English, I'm June Simms.