B2B Payments

The Success Of Amazon Business Could Be A Coin Toss

Amazon Business, Amazon’s B2B online supply service, has arrived, and it is set to fully engulf AmazonSupply, Amazon’s older B2B commerce program Wednesday (May 13). Since Amazon Business was announced only weeks ago, Amazon revealed that it plans to eventually carry more than 250 million products for business buyers.

Considering Amazon’s high standing in the digital commerce market, it isn’t a stretch to assume that Amazon Business will see similar success. It is not a guarantee, however. AmazonSupply’s closure is proof that even the eCommerce giants face a struggle when it comes to the B2B world. But with the world’s B2B eCommerce reaching new heights, expected to hit a valuation of $6.7 trillion by 2020, Amazon will try again.

Amazon Business won’t launch into full throttle until AmazonSupply is officially out, but India’s case study suggests sunny skies ahead for the new unit. AmazonBusiness.in has been in pilot phase in India since April 21, and has already experienced significant traction. The results could spell out what Amazon Business will look like in other markets.

India’s Success Story

In a recent interview with the Deccan Herald, AmazonBusiness.in’s General Manager Kaveesh Chawla told reporters that the service is already playing a successful role in India’s B2B eCommerce market. “We launched our service on April 21,” he said. “Already we have added thousands of customers from Bengaluru during our pilot stage initiative and we have received more than a thousand queries from outside Bengaluru.”

According to Chawla, Amazon Business in India can attribute its early positive result to its customer-focused business strategy, which includes bilingual customer service and an array of payment options, including debit and credit cards, cash-on-delivery, and other rails like the National Electric Fund Transfer and Real Time Gross Settlement, two methods that are most popular among B2B payers. Looking ahead, Amazon Business will reportedly explore supporting mobile payment capabilities in India.

Focusing on smaller businesses, too, has been crucial to the B2B program’s success, Chawla said, adding that 46 million SMEs in India face challenges through a lack of supplies and difficulties with procurement, pricing and delivery. “Very large companies can only overcome these difficulties,” he said. “We will address these problems and give better services to our B2B customers.”

Amazon Business, he said, aims to provide SMEs with an easy, fast platform for procuring goods, “without locking in their working capital.”

“Our goal is to build a platform which consumers love,” Chawla told reporters. “We want to be a product or solution which give customers the largest selection under one roof, unique experience with consistency, ability to track delivery to their doorstep, etc.”

That “one roof” is a local warehouse run by AmazonBusiness.in, though Chawla said that it is admittedly not a high-tech operation. As Amazon Business continues through its pilot phase in India, he said, Amazon India will aggregate data to further optimize its warehousing and distribution services through Amazon Business.

In less than a month, however, AmazonBusiness.in has experienced significant growth. While the service first launched with simple office supplies, it now covers products like cleaning supplies for various sectors, and is looking to expand into the health care industry by the end of the year. Reports said that the service has already added thousands of business customers from Bengaluru alone.

Learning From Past Mistakes

Until this week, Amazon Business ran in beta phase. With its launch and absorption of AmazonSupply, the B2B sector will be interested to see exactly what Amazon has improved upon for the online buying and supplying process.

The differences between the two wholesale services, however, are not entirely clear. According to Amazon Business spokesperson Lori Richter, Amazon Business will offer 100 times more products than AmazonSupply did. New features also include business-only pricing and a multi-seller marketplace, and, later on, the company will work to add new payments, shipping and technical support services.

It is difficult to assess, however, how Amazon Business may improve upon AmazonSupply – largely because Amazon CEO Jeff Bezos has remained almost entirely quiet about AmazonSupply. Prentis Wilson will serve as Vice President of the new unit, meaning leadership will remain largely the same considering Wilson’s past as VP of AmazonSupply. But with a wider range of stock and enterprise services, Amazon Business has a chance to emerge from the shadows and become a money-making engine Bezos and Wilson are not afraid to talk about. The B2B world, though, will have to wait and see.

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