Indian here. For people from my class (middle to upper-middle), Amazon has largely replaced Flipkart (the market leader), and eCommerce has largely replaced local commerce.

Payment is a massive pain in the ass though. Getting credit cards is a nightmare if you don't have a traditional job. You need 2-factor authentication for all transactions, which is just a ton of work.

I often end up using 'cash on delivery' just because I'm too lazy to enter my debit card details and do the 2-factor authentication

Flipkart still has a better presence outside of the big cities, but Amazon is catching up, fast.

Why don't use PayPal then?

You're close: Paypal is a bit hamstrung by regulations in India, but the domestic mobile wallet industry has been growing. My prediction is that China & India will (continue to) leapfrog credit cards in favor of mobile payments. (P.S. not linking here because it's a bit off-topic but I've added links to my article & slide deck about this in my HN profile.)

Paypal doesn't allow you to hold balances in Indian Rupees. You can only use dollars.

Because PayPal doesn't support the two step authentication that Indian banks require.

I use 2FA on my Paypal account.. ?

> I shudder to think of Amazons CFO shuddering to think of that.

Care to elaborate? Cash-on-delivery is a common payment method in Japan, and Amazon Japan and many other online marketplaces have been using it for years. It can be problematic operationally, but how is it worse than credit card settlement for the finance department?

Payment at the convenience store is another common method here, and it's arguably more problematic than COD as the marketplace/merchant has to wait for the payment to go thru before shipping.

Control I guess - how to be sure what was due was collected, passing it back up the chain, vulnerable to fraud and violence, and of course no nice customers fronting you billions in free cash each day.

They already do. I live(rather work from home) in a remote village in Southern India. Ordered a Nikon camera recently which the local stores said will take atleast 7 days to procure, and Amazon delivered in 3 days. The item was shipped all the way from Northern India(Nagpur) and guess what, it was 500INR cheaper on Amazon.

While on one hand I was more than happy to get it in three days and a little cheaper, I also realized that this won't last forever. Amazon's capital has gotta run out at some point in time and the cheap/fast service will stop there.

> Amazon's capital has gotta run out at some point in time

They're famous for being willing to push competitors into the ground on margins, at whatever loss is necessary in the relative near-term. It's very likely they're going to seek to squeeze Flipkart on margins until they're struggling to operate due to a very high cash burn (with venture capitalists eventually unwilling to keep pouring red ink down the drain).

I'd bet that Amazon views India as a truly massive future market. They really can't crack China properly, and likely never will. India however, they can crack. They'll pour vast resources into it to build out a dominant position. If you told Amazon they can own a dominant position in India for the next 30 years by spending $10 billion today, they'd write that check immediately.

They're the world's largest retailer by market valuation, and carry $14.4 billion in cash (with the ability to raise whatever sum they need at any time they need it). Further, AWS has become a cash generating monster, that will fund any adventures Amazon wants to undertake over at least the next decade.

No chance they run out of capital.

Makes sense once they are able to setup kiosks in villages and have employees there to order on behalf of customer with COD, you have largest profit making reailer in the world. If they can work ith few FMCG like Godreg,Uniliver, P & G and Nestle etc.. along with Indian Postal and local couriers.. you have great monster. Indians does not care about anything other than price (durability/quality) so 1 rupee less than local guy on kiosk then people will buy from kiosk guy. I wish i had some capital to try this out..

EDIT: Also Indians still share in village so even if amazon says they will give only 10 Hamam soaps but at 10% less or 10 Horlicks with 15% less, people will pool and buy.

>Indians does not care about anything other than price (durability/quality)

"do not care"

That's a solid point :-) and largely true, though a generalization. Changing some at least among the younger generation in cities, though.

Amazon's threat is Jack Ma. And Jack Ma is bigger than Amazon.

Jack Ma , will be supplier for Amazon, i dont see them having skills to be front end retailer

Nagpur is close to the center of India, not the north.

Perhaps the poster meant cultural North India, which (in my experience) is only contrasted with cultural South India, which is comprised of the states in which Dravidian languages are spoken by a majority, namely: Kerala, Tamil Nadu, Karnataka, AP, and Telangana.

You have my apologies. We often joke that anything northern than Bangalore is North India!

Well then Chennai is North India!! A lot of people don't realize that Bangalore is actually south of Chennai.

I think when people say "North India" what they typically mean is the areas that speak Indo-Aryan languages (as opposed to Dravidian ones).

My guess is that India will likely leapfrog from cash to mobile payments - so in the long run that shouldn't pose as much of a problem to Amazon or any other vendor. There is already a lot of startups and established companies offering mobile wallets, and I believe many of then are setting good traction too.

Credit cards aren't the only way to pay on the internet, and also not the best way, as long as you have a working banking system.

In Germany for instance credit card ownership rates are fairly low, still Amazon is doing really well using direct debit.