eCommerce: Marketplaces in India
Amazon in Talks to Launch Amazon Pay as a Standalone Service in India
Amazon is reportedly in talks with the National Payments Corporation in India to launch Amazon Pay as a separate app in the market. Here is how this could benefit the worldwide eCommerce leader.
Article by Nadine Koutsou-Wehling | August 20, 2024Amazon Pay in India: Key Insights
Launch as a Standalone App: According to company insiders, Amazon is in talks with the NPCI to launch Amazon Pay as a separate service in India. It could start within just a few months.
Protecting Amazon's Market Share: Discussions for a standalone payments service are taking place as Amazon sees quick commerce rivals becoming more popular among Indian consumers. By responding to the market's habit of paying for everything with digital wallets, Amazon hopes to gain relevance in India.
Amazon is having discussions to make Amazon Pay a standalone app in India, TechCrunch reported on Monday. Currently, Amazon Pay is integrated into Amazon’s eCommerce platform in India, with which consumers can do more than just pay for their orders: Users can transfer money, buy insurance or travel tickets, and make investments.
Confidential sources told TechCrunch that Amazon has been considering separating Amazon Pay from its eCommerce platform for about a year. The launch of the new payment service could happen in the following months, but Amazon is reportedly in talks with the National Payments Corporation in India (NPCI) right now.
Why Would Amazon Want to Unbundle Its Payments in India?
Despite being the world’s largest eCommerce marketplace, Amazon is facing obstacles in India. In short, the U.S. eCommerce giant is grappling with intense competition from retailers in India that are more flexible in adapting to regional consumer preferences and the regulatory environment.
Amazon does have substantial base in India, thanks to its extensive investments in infrastructure development and merchant acquisition. Not for nothing is amazon.in Amazon’s 8th largest marketplace domain by GMV.
But Amazon has made some strategic errors that threaten to undermine its market share, especially as other major players like Walmart are also entering Indian eCommerce with platforms like Flipkart. Amazon’s strategic mistakes include not investing in the burgeoning quick commerce sector, which is growing at lightning speed in India, and a slow acquisition of sellers on its platform, reducing the variety of products available on Amazon. In addition, regulatory updates by the Indian government are restricting Amazon's normal business operations, creating ongoing hurdles to the platform's growth.
The launch of Amazon Pay as a standalone app is therefore seen as a response to Amazon's dwindling hold on the Indian market. Digital payments are thriving among Indian consumers, who use eWallets to pay for all kinds of transactions throughout the day. Decoupling Amazon Pay from the eCommerce site is intended to make Amazon Pay more recognizable as a whole in India. The market is not known to be a fertile breeding ground for all-encompassing super apps, as it is in China, so this adaptation to regional preferences may prove more successful.
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