Will Amazon be expanding in India?(Read article summary)
Amazon is taking steps to grow its Indian markets, although a series of obstacles – including concerns about India's infrastructure – could prove problematic.
While some booksellers (Borders) are shutting down, others (Amazon) seem to be grabbing at growth opportunities. The latest evidence of Amazon's ambitions: signs that the e-tailing giant is looking to expand in the Indian market.
According to The Times of India, Amazon has been in talks to buy prominent Indian online retailers and gain a foothold in the Indian market. This method of buying Indian firms as a way of starting business in India has been popular with companies like eBay and Groupon.
However, The Times of India also reports that talks are facing obstacles, and speculates that Amazon may look to set up business in India on its own.
Concerns have been raised over India's poor infrastructure, and whether Amazon would effectively be able to ship books to customers. But, Business Insider notes that Amazon has worked around this problem before in China, sending delivery people to customers' homes to drop off books and collect payments in cash.
This could be the perfect time for Amazon's venture into India, as the Indian middle class is booming. A large portion of the population with a sudden increase in spending money and leisure time could create a highly lucrative market for Amazon. The Indian printing industry is growing as well. According to Global Trade, Indian is the third largest publisher of English language books in the world, after the US and the UK, and the Indian printing industry is growing almost twice as fast as the Indian economy itself.
One large obstacle that stands in the way of Amazon's potential success in India, however, is the fact that most Indians do not have consistent internet access, and therefore do not online shop, according to The Independent. For a strictly online retailer like Amazon, this could be a crippling problem.
Although rumors about Amazon's hiring in India are all over the internet and evidence of Indian expansion appears on india.amazon.com, Amazon's Indian website, a spokesperson from Amazon recently denied all rumors about a potential Indian branch.
But that has not quieted speculation. While the American economy is still in recession, the Indian economy is growing rapidly, as is its potentially book-buying middle class. Despite the considerable obstacles Amazon might face in establishing an Indian branch – chiefly the country's weak infrastructure – the chance to claim a slice of the Indian market may well remain a tempting prospect.
Megan Wasson is a Monitor contributor.