From the outside, Amazon looked paralysed. India’s nationwide lockdown—the world’s most stringent in the fight against the Covid-19 pandemic—brought the globe’s largest e-commerce platform to an almost complete halt. For nearly two months, it was allowed only to sell essentials such as groceries.
But even as it chafed at the bit to resume operations across all its categories, it was recalibrating for a new world order. One where customers are less likely to spend big due to the worsening economic slowdown. Where items like personal protection equipment (PPE) are highly sought after.
Made in India
Amazon re-examines its Made in China, Made for India approach
Amazon’s private labels—which contribute 5% of its revenue in India—are facing an unprecedented threat. With Chinese sourcing, the backbone of its pricing advantage, hampered by the Covid-19 pandemic, will Amazon be forced to go local?
After selling only essentials for 2 months, Amazon’s inventory has dropped 70%, giving its private labels greater visibility
But its high-volume, high margin private labels have a problem—they're overwhelmingly sourced from China
With global supply chains disrupted by Covid-19 and India raising import duties to push local manufacturing, Amazon is re-thinking its reliance on China
Amazon has tasked its Accelerator brands with making PPE kits in India, leaving room for other categories to join suit