Amazon.com has set up a subsidiary in India, Junglee.com, that aggregates products from local online and offline retailers, but does not sell them, it said Thursday.
When a customer is ready to buy a product, Junglee will either direct them to a link to the seller's website, or help them find a seller's physical store if they would rather purchase the product in person or call the seller and place an order by phone, Amit Agarwal, vice president of Amazon.com said via email.
The move suggests that the company may be trying to get insight into consumer behavior, identify suppliers and popularize the website, until it decides to set up its own sales operations in India, said Asheesh Raina, principal research analyst at Gartner.
Amazon.com said that retailers in India can to start to advertise and list their products on Junglee.com at no cost.
It said it has tie-ups with hundreds of local online and offline retailers, and the Indian operations of global companies like Microsoft and Reebok. It also displays products from Amazon.com.
The company expects Indian retailers will be able to use Junglee.com and Amazon Seller Services to showcase their products to customers across the globe, and drive customer traffic to their websites and physical stores, Agarwal said. "We want to give Indian sellers global visibility and help expose their business to the rest of the world," he added.
Some top local online retailers such as Flipkart.com, which is widely regarded as potential competition to Amazon.com in India, do not figure in the list of retailers.
Flipkart.com, which was founded by former Amazon.com executives, said it had no plans to sign up with Amazon.com for the Junglee service. As Junglee.com is an aggregator site that does only price comparison, the value proposition for the customer is limited, Flipkart said in a statement. There are already several price comparison sites that are doing the same, it added.
Online sales are still 1 percent to 2 percent by value of retail sales in India, according to Raina. But as payment systems and courier services improve, and people start using ubiquitous mobile phones for e-commerce, this will change, he said. Amazon is eyeing the volume opportunity that India's large population presents in the long term, he added.