Customers Adopting Credit Facilities To Generate Over 25% Sales By 2026: Amazon Business' Subhas
The company is estimating that customers adopting credit facilities will generate more than 25 per cent of sales in the next three years, said Suchit Subhas, Director, Amazon Business in an interaction with BW Businessworld.
He stated that the company has witnessed an increase in the share of large enterprise customers growing by over 100 per cent year-on-year (YoY). "However, we also understand that their procurement needs are complex and require enhanced features for us to make a meaningful foray into their recurring spending," Subhas added.
With the start of invoice by Amazon and punch-out features, in 2024, Amazon Business is looking forward to providing customised procurement solutions to large businesses across the country alongside our continued focus on micro, small and medium enterprises (MSMEs).
Talking about how the company fared in 2023, Subhas mentioned, "Today, we have managed to build Amazon Business as a goods and services tax (GST)-enabled selection with over 19 crore products carried by more than ten lakh sellers, delivering to more than 99.5 per cent pin codes across India."
The director also stated that over the last few years, Amazon Business has witnessed exponential growth with, a 150 per cent increase in customers and has seen an overwhelming response from tier 2 and 3 cities, with 65 per cent buying customers and 55 per cent orders coming from smaller cities.
Indian MSMEs In 2024
MSME space is one of the most crucial and an emerging part of India’s economy, producing products and services for domestic and global markets. To further boost the rapidly growing industry, the government and leading industries are introducing several initiatives and programs. "However, the segment still faces many challenges with Indirect spending being one of the key challenges to tackle," he added.
In early 2023, a report by GAME with Dun & Bradstreet (D&B) and Omidyar Network India highlighted that an estimated 5.9 per cent of the gross value added (GVA) in the Indian economy — Rs 10.7 lakh crore is locked up in delayed payments from buyers to MSME suppliers.
However, Subhas mentioned that more and more business customers are moving from offline procurement to online procurement for transparent pricing, easy access to quantity deals, better control of the spending and visibility.
MSMEs and large enterprises are becoming more digitally savvy and leverage technologies to improve their efficiencies such as the adoption of online marketplaces, digital payment systems and cloud-based tools for managing business operations. This is reflected in the 60 per cent YoY growth of buying customers coming from smaller cities in 2023 and contributing to 55 per cent of orders compared to 52 per cent last year, the director claimed.
"In line with what we have heard of customers advocating digital procurement, we saw 30 per cent of Amazon Business sales being driven by multi-user account (MUA) users last year (up by 1600bps year on year), thereby moving their procurements to AB," he further claimed.
As India witnesses more and more businesses opting for online methods of procurement across tier 1 and 2 and below cities, Subhas asserted, "We look forward to providing customised procurement solutions to large businesses across the country alongside our continued focus on MSMEs."
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