Kindle India – Amazon lays groundwork to sell Kindle Fire HD, Kindle Phone in India

We’ve talked a lot about the importance of China and India for Amazon. Both Kindle Fire HD and Kindle Phone will live or die based on how well Amazon can tap into emerging markets like China and India.

Kindle Phone, Kindle Fire HD, and other Kindle devices must target emerging markets like China and India to have any real chance of competing with the Apples, Samsungs, and Microsofts of the world.

Amazon expanded its App Store to China just a few weeks ago. Just last week it started selling Kindle Fire HD International to 170 countries, including China and India. Now, we get news from Times of India that Amazon India has opened as an online marketplace.

What do we know about Amazon India?

Actually, quite a bit.

  1. It’s an online marketplace for the moment. Third party sellers can list their products and sell them to customers.
  2. Currently, it sells only Books and Movies & TV Shows. Amazon India offers 7 million local and imported books. Amazon India offers 12,000 movie titles and shows.
  3. It’s expanding to Phones and Cameras and Electronics soon.
  4. India’s online market is still very small – $800 million in revenue from 13 million online shoppers in 2012. Note: This is in a country of more than 1 billion people.
  5. Internet penetration is just 8% so lots of room to grow.
  6. India has a few players already in this space – FlipKart (India’s largest online retailer) and Infibeam have both set up similar marketplaces.
  7. Indian regulations don’t allow Amazon India to sell its own products. So Kindle Fire HD and Kindle can’t be sold via Amazon India. This is a bit strange -

    Amazon will not stock and sell its own products because India’s FDI regulations do not allow online multibrand retailers to sell their own products.

This is the most interesting part from the Times of India article -

The country’s internet penetration stands at about 8% with 137 million users, of which roughly 20 million are shoppers including the online travel agency market.

This reflects China’s online market back in 2005. China now has 538 million internet users and 227 million online shoppers.

It is quite possible that in the next 8 to 12 years India gets to where China is now. If that happens, Amazon would be glad it started building Amazon India now.

Kindle Fire HD India – How can Amazon sell Kindle Fire HD and Kindle Phone in India?

If what Times of India writes i.e.

Amazon will not stock and sell its own products because India’s FDI regulations do not allow online multibrand retailers to sell their own products.

is true, then Amazon is in a real quandary.

To sell Kindle Fire HD and Kindle Phone, Amazon would have to sell via other retailers. It couldn’t sell them via Amazon India.

Perhaps Amazon views Amazon India as a foundational step to build its brand and customer base. It can always figure out workarounds later. Who knows what legal changes India will see in the next 5 to 10 years. In Canada, Amazon worked out some complicated agreement in 2012 that allows it to set up further warehouses and expand. Eventually, Amazon should be able to set up shop properly in India and sell Kindles and Kindle Phones and Kindle TVs and Kindle Fire HDs.

For the moment, we just have a complicated situation where Amazon has set up Amazon India but can’t sell its own products like Kindle and Kindle Fire HD through it.

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