Amazon Develops Generative AI for Indian SMEs

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Amazon is accelerating its India expansion through new partnerships and services aimed at empowering small and medium businesses (SMBs) in the country. The e-commerce giant announced collaborations with India Post and Indian Railways along with an AI-powered assistant called SahAI to boost its delivery infrastructure. It also launched a new fulfillment service for direct-to-consumer (D2C) brands during its annual SMBhav event held in New Delhi.

These initiatives underscore Amazon’s commitment to tap into the vast SMB market in India. With around 12 lakh sellers already on its marketplace, Amazon is leveraging technology like AI to provide a personalized assistant for each business.

 Tie-ups with India Post and Indian Railways to Strengthen Delivery

To reach sellers and artisans in remote corners of India, Amazon inked a deal with India Post. Through this partnership, Amazon’s Global Selling program will utilize over 100 mail export centers run by India Post to ship products of its over 125,000 exporters.

Vineet Pandey, Secretary of India’s Department of Posts, said this collaboration will empower lakhs of Indian SMBs to leverage e-commerce exports. Using the vast network of post offices, Amazon can now penetrate deep into rural and remote areas.

For domestic logistics, Amazon entered an agreement with Indian Railways to transport orders via dedicated freight rail routes. Amazon has already started operations on the Rewari-Palanpur freight corridor and will expand to more railway lines over time. 

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Utilizing the railways’ pan-India reach, Amazon can bolster its delivery capabilities in a cost-effective manner. As per estimates, the partnership can potentially handle over 500 metric tonnes of cargo per day.

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 SahAI: A Personal AI Assistant to Guide Sellers 

One of the major highlights of the SMBhav event was the announcement of SahAI, an AI-powered assistant for sellers. Still in testing mode, SahAI (which means ‘help’ or ‘assist’ in Hindi) is designed as a conversational agent to guide sellers through Amazon’s backend systems.

Using natural language processing, SahAI can understand sellers’ queries in simple terms and provide customized responses. It can suggest relevant product information and attributes to include in listings based on product images. The AI assistant stays updated on market trends to advise sellers on pricing, advertising and inventory management.

Manish Tiwary, Country Manager for Amazon India, said SahAI will act like a personal assistant for lakhs of sellers on their platform. The aim is to simplify the process of selling on Amazon for all kinds of businesses, especially SMBs with limited e-commerce experience.

 Launch of Multichannel Fulfillment for D2C Brands

In a first, Amazon announced it will offer its fulfillment services to Direct-to-Consumer (D2C) brands that don’t necessarily sell on its marketplace. By paying a fee, D2C brands can access Amazon’s network of warehouses and logistics infrastructure to store inventory and ship products to customers.

This ‘Multichannel Fulfillment’ service covers end-to-end order processing, tracking, invoicing and delivery leveraging Amazon’s existing capabilities. However, D2C brands will have ownership of the customer relationship.

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Opening up fulfillment to D2C players will expand Amazon’s reach and volume. It pits Amazon directly against domestic logistics startups like Shiprocket and Xpressbees which currently lead this space.

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 Challenges Remain Despite Big Bets on India

Amazon founder Jeff Bezos has committed to invest $15 billion in India by 2030. This includes $12.7 billion for Amazon Web Services and $2.3 billion for e-commerce. However, Amazon has shut down non-core businesses like food delivery, wholesale and edtech in India in the past year.

Several high-profile executives have also left the company recently. This has sparked speculation whether Amazon is scaling back its India investments. Experts believe that compliance and policy hurdles continue to pose challenges for foreign retailers like Amazon.

Despite the roadblocks, Amazon is forging ahead with long-term strategic initiatives like partnering with offline networks and building AI-driven tools for sellers. It recognizes the massive growth potential of enabling 60 million SMBs in India to sell online. New commerce models like ‘Local Shops on Amazon’ are also tapping into India’s omnichannel opportunity.

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The question remains whether Amazon will prevail against competition from Walmart-owned Flipkart and JioMart. But its flurry of recent announcements and innovations indicate that Amazon is digging its heels for the long haul. Leveraging AI to solve pain points can help Amazon gain an edge in this critical market.

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