Hemant Khatri lives in Sanganer, a casbah on the outskirts of Jaipur in Rajasthan. For years the Khatri family has been living on selling tapestry art to exporters. But, the influx of internet and smartphones is changing the family’s life, and more so by a foreign e-commerce giant, Amazon.
The e-commerce behemoth has something called the global selling program (GSP), which has nothing to do with its India business. GSP allows people like Khatri to put up their products on Amazon’s global websites, thereby creating mini-exporters.
Khatri does not sell on Amazon India. “There is no demand of tapestry in India, but it has huge demand internationally,” he says. Over the past seven months his business has grown 15 times.
There are 6,000 such sellers who use GSP for selling products like wooden handicraft, bed sheets, towels, sporting goods and Ayurveda and herbal products. “These products are very popular in the US but are available at very high price points otherwise,” says Eric Broussard, vice president of international seller services at Amazon.
Another seller, Sachin Gupta, who lives in Bengaluru sells chessboards made of wood, marble and brass. More than half of his business comes from sales in the US. “The demand in the international market is so huge that I do not get time to fulfil the demand in India,” says Gupta.
Started in India nine months ago, Amazon’s GSP gives Indian merchants access to markets in nine countries across the US, Europe and Japan. “In December, more than 1,00,000 products were shipped from India to our fulfilment centres (or warehouses) in the US,” says Broussard.
Sellers can either send the products to the buyer directly, or may use the fulfilment-by-Amazon (FBA) service. In FBA, by paying a fee, the seller can ship the product to the warehouses and leave the packaging, delivery and customer service to Amazon. The products are delivered to the buyer within two days. In case of returns, Amazon takes care of that too, and also the refunds.
However, India is not the first country to implement GSP. In China, a country where Amazon could never establish its domestic dominance, GSP was started more than two years ago. “Both India and China are sourcing countries, so there is a lot of demand for products that are made in these countries,” says Broussard. In the past one year, revenue for Chinese sellers grew by 150%. But, India and China have different kinds of sellers. China is more popular with electronics. Home décor is stronger for India.
The margins in exports are also higher. Gupta makes 35% more on margins, and sometimes even 100% more on a chessboard. Khatri on the other hand doesn’t have any Indian buyers, but compared to offline exporters, he still makes 5-7% more margins on Amazon. He is planning to double the number of items to 700 in the coming months.