India is estimated to contribute 13% to Amazon’s international sales by 2023: Report

Another 4 years and India could be one of the biggest contributors to Amazon’s international sales!

That’s what a report by RBC Capital Markets says. The report distinctly states that India could beat Brazil, Mexico, Turkey and Australia in next 4 years to become one of the major contributors to Amazon’s international sales.

The sales will generate a gross estimate of US $ 32 billion by 2023 increasing Amazon’s market share in e-commerce to 35 per cent in the country, up from 30 per cent in 2018.

Currently, Germany is the largest international market for Amazon, but the author of the report, analyst Mark Mahaney, has estimated that India will be contributing 13 per cent to Amazon’s international sales and 4 per cent of total sales in the stipulated time period.

Although Amazon does not provide a breakup of country-based revenue or sales in its earnings release of quarterly international sales, India is expected to generate revenues, which includes marketplace commission from gross sales besides direct sales, of US $ 18 billion.

“India’s e-commerce sales are expected to be the second-fastest growing among the top 10 APAC countries, at 26 per cent three-year annual growth, thanks in part to its low (5 per cent) e-commerce penetration, which compares to 24 per cent in China and 9 per cent in Japan. Overall, we believe this growth will be driven by the rising rate of smartphone adoption, rapidly growing middle class, influence of its young population and growing penetration of e-commerce players like Amazon and Flipkart,” the note by RBC Capital added.

Seeing the scope of growth in India, with e-commerce penetration reaching up to 9.5 per cent in 2023, Amazon has been quick to invest over US $ 6 billion in the Indian market since its entry in 2013. Despite grappling with stricter FDI laws, the company has bought stakes in the big names in retail in India. Amazon bought a 49 per cent stake in a Future Group subsidiary with scope for further investments in the future, gaining access to one of the largest bricks-and-mortar retailers. Besides this, Amazon has bought a 5 per cent stake in Shoppers Stop and holds a 49 per cent stake in retail chain More.