January 15, 2020 / 6:38 AM / 9 days ago

Under fire in India, Amazon offers small business owners $1 billion olive branch

NEW DELHI (Reuters) - Amazon.com Inc CEO Jeff Bezos said his company will invest $1 billion (767.99 million pounds) to bring small businesses online in India, reaching out to some of his fiercest critics in a goodwill visit that saw him donning traditional Indian attire and fly a kite with children.

Amazon and Walmart’s Flipkart have been hit with a barrage of criticism from India’s brick-and-mortar retailers who accuse the U.S. giants of violating Indian law with deep discounts and discriminating against small sellers by promoting select big ones. The companies deny the allegations.

Just this week, the Competition Commission of India (CCI) launched an anti-trust probe to look into those allegations.

Amazon said it will setup digital centres in 100 Indian cities and villages to help businesses get online to sell their goods and will offer support in marketing and logistics.

The investment of $1 billion will help bring more than 10 million Indian businesses online and enable exports of India-made goods worth $10 billion by 2025, it added.

Speaking at a company event at a New Delhi stadium which Amazon described as “a first-of-its-kind mega summit” bringing together more than 3,000 small businesses, Bezos praised India and said Amazon was committed to being its long-term partner.

“The dynamism, the energy ... the growth. This country has something special,” Bezos, who wore a blue-coloured traditional Indian jacket, said to the audience which responded with cheers.

Other events in India have included Bezos paying his respects to a memorial dedicated to Mahatma Gandhi. Sources say he has sought a meeting with Prime Minister Narendra Modi and other government officials.

The Confederation of All India Traders, a group representing roughly 70 million brick-and-mortar retailers, has said it will protest in 300 cities during Bezos’ visit.

But protests so far have been small. At one in New Delhi and another in the eastern state of Odisha on Wednesday, there were about 50 demonstrators each.

“We are not able to compete. There is an unhealthy competition,” said Girish Prasad Ratha, a demonstrator who said he had lost 15% of his sales in the last two years because customers were increasingly going online.

The company maintains it provides opportunities to more than 550,000 sellers on its platform to grow their business in India.

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India’s e-commerce market revenues are set to touch $120 billion this year, having grown 51% annually between 2017 and 2020, according to a study by the CCI.

The $1 billion investment announced on Wednesday adds to $5.5 billion of investments in India announced by Amazon since 2014.

Bezos, who arrived on Tuesday, is due to fly out on Saturday.

Reporting by Sankalp Phartiyal and Aditya Kalra; Additional reporting by Jatindra Dash in Odisha; Editing by Edwina Gibbs

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