Passage to America

There has been a view among the top brass at Amul that the US market’s potential has not been fully exploited. But none of this relates to the complexity of the market or the lack of effort from Amul. It’s just that access to a multitude of consumers has always been a challenge.

Over the previous year, that has been addressed when Amul become a part of the Amazon Global Selling program. The program has allowed a bandwagon of over 23,000 Indian sellers, entrepreneurs, manufacturers and even SMEs — irrespective of their size — to sell their products across the world. Although the revenue from the US is still not significant (overall Rs.270 crore), it can easily double each year, says R S Sodhi, managing director, Gujarat Cooperative Milk Marketing Federation, the entity that markets Amul products.

Before the arrangement with Amazon, Amul reached out to the Indian diaspora in the US by having a modest presence in 2,000 outlets. In late 2014, Amul, after having been in the US for two decades, opened its plant in Waterloo in upstate New York to manufacture ghee, paneer and shrikhand.   

A big advantage of being in the US is the freedom to price products as compared with the Indian system of maximum retail price (MRP). For instance, a litre of Amul ghee sells upwards of $24 (Rs.1,560) there compared with Rs.590 in India. For now, it sells only ghee and gulab jamun. “What surprised us was that over 90% of the demand for ghee came from the non-Indian population,” he points out. Amazon takes care of the packaging and sends it across the US from Waterloo. Gulab jamun goes from India to the US factory and then to Amazon’s warehouse. The plan is to expand the product portfolio on Amazon to sell paneer and shrikhand too.

“We launched with a few hundred sellers in May 2015 and now over 65 million products are listed by Indian sellers,” points out Gopal Pillai, director & GM (seller services), Amazon India. According to him, the interest spawns across categories such as home, apparel, health and wellness, entertainment, jewellery and luggage. It covers ten countries including the UK, the US, Japan, Canada and France reaching nearly 300 million consumers. This includes names such as Fabindia, Manyavar and Patanjali.

Take the case of the wellness company Organic India which has a turnover of around Rs.350 crore. It entered the US in 2007 and till 2015, the business was small. Since then, it has seen Rs.100 crore coming from there, with an estimated 12-15% coming only from Amazon. CEO Abhinandan Dhoke, says there was always a market for his products in the US, though the offline model presented limited potential. “We knew there was demand from the remotest parts of the US but no way to reach out to them. This is important since Organic has gained high acceptance levels in the US.” For Organic India too, much of its portfolio was sold on Amazon once success was tasted. From five to six stock keeping units two years ago, it sells its bestselling 20 products today such as ashwagandha, psyllium, triphala, turmeric and tulsi. 

In early August, Titan Company too joined hands with Amazon. S Ravi Kant, CEO (watches & accessories), says the company does not have a retail presence. “Titan sells in over 30 countries and the US has been on our radar. E-commerce being one of our fastest growing channels, this is an innovative solution to reach out to millions of consumers,” he explains. The initial plan is to sell 500 variants of Titan and Fastrack priced at $30-300 (approximately Rs.1,930-19,290). Titan estimates the US watch industry to be around $11-12 billion and e-commerce to make up 15-20% of it. In the next quarter, the company will launch Fastrack accessories. Titan is looking to increase its contribution from international markets which is currently under 10% to at least 15% over the next two to three years. This also marks the first instance of Titan taking the online route to enter a new market.

Joining the Amazon bandwagon now is Dabur, that will sell 30 of its products including Vatika, Meswak and Chyawanprash. Dabur already has 30% of its revenue from international markets and targets to sell its products in the US, Canada and Mexico. The company plans to add 80 new products over the next six months.

Following Amazon’s footsteps, Flipkart will now sell products from 100,000 sellers in over 190 countries through Flipkart Global. Even as the e-commerce war heats up across markets, for Amazon, which entered India in June 2013, this is another way to broaden its set of Indian consumers living overseas besides creating a market for non-Indians. Customers, globally, are demonstrating the ability to spend and buy products from almost anywhere. And, Indian brands, thanks to Amazon, appear to have cast the net really wide.