Amazon.com sets up portal in India, will only service other retailers

Amazon.com has set up a website with its brand in India, but will not be selling on the site.

In line with Indian government rules, the new marketplace Amazon.in is only offering sales and order fulfillment services to Indian retailers.

Amazon Seller Services set up in February last year another website called Junglee.com that allowed retailers in India to advertise their products free to Indian shoppers and drive traffic to their stores where the sale was completed.

With the launch Wednesday of its “Selling on Amazon” and “Fulfillment by Amazon” programs on Amazon.in, sellers in India will have access to unlimited and free ‘virtual shelf space’ and scalable, pay-as-you-go fulfillment and customer service offerings, Amazon said in a statement.

The Junglee.com website will continue to operate, as it meets a different requirement, a Amazon India spokeswoman said Wednesday.

Online retailing in any form is not permitted in India for companies with foreign direct investment, the government told Parliament in March, reiterating a long standing Indian policy. Foreign direct investment, up to 100 percent, is permitted, however, in business-to-business e-commerce.

The product categories handled by the Amazon.in site currently include books, movies and TV shows. Amazon has promised on the website that cameras, mobiles and other categories of products will follow soon.

The online store offers 7 million print books, across over 200 categories, but does not offer ebooks or Kindle readers and tablets. Amazon did not comment on whether the Kindle products and ebooks would be offered through the site eventually.

A leading Indian vendor Flipkart discontinued music downloads recently from its portals, amid reports of large scale piracy of its MP3 format music. “We have realized the music downloads business in India will not reach scale unless several problem areas such as music piracy and easy micro-payments etc. are solved in great depth,” the portal said in a statement. It will continue with ebooks, a newer service, as it sees greater growth opportunity for ebooks as people appear willing to pay for them, a Flipkart spokeswoman said.

Amazon is offering free delivery on orders fulfilled by it for a limited period, as well as cash-on-delivery, a strategy tried by other online Indian portals. Indian users have been found to be reluctant to enter their credit card or bank details online. Only orders fulfilled by Amazon will be eligible for cash-on-delivery.

A fulfillment center has been set up on the outskirts of Mumbai, the spokeswoman said. Other centers will be set up depending on the growth the company sees in India.

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