March 2 (Reuters) – Amazon will stop charging sellers in India referral fees for products under 1,000 rupees ($10.98), the company said on Monday, as it seeks to attract more merchants to its online marketplace and gain a stronger footing in the country’s competitive e-commerce industry.
The move expands on Amazon’s “zero referral fee” policy launched last year, which covered about 12 million products priced below Rs 300 and helped drive a 50% increase in the number of new sellers joining Amazon in India. A referral fee is a commission that sellers pay to Amazon for each product sold.
The new structure, which will take effect on March 16, covers more than 125 million products, Amazon said, adding that it was also reducing some shipping costs.
“This move is designed to make selling on Amazon more lucrative and simpler, particularly for small businesses and entrepreneurs in tier 2 and 3 cities,” said Amit Nanda, director, Merchant Partner Services, Amazon India.
India has become a crucial market for Amazon, thanks to a rapidly expanding internet user base that has fueled the growth of e-commerce in the world’s most populous country.
But Amazon faces fierce competition in the region from Walmart-backed Flipkart and the retail arm of billionaire Mukesh Ambani’s Reliance Industries, while fast-commerce players such as Eternal’s Blinkit and Swiggy’s Instamart have been rapidly grabbing market share.
Amazon said in December it would invest more than $35 billion in India by 2030, looking to expand its artificial intelligence infrastructure, but also with a focus on growing retail logistics and spurring small business growth.
($1 = 91.0480 Indian rupees)
(Reporting by Deborah Sophia ​in Bengaluru; Editing by Maju Samuel)