Google, Amazon Agree To Allow Each Other’s Streaming Media Apps

Google and Amazon announced on Thursday that they are ready to allow each other’s streaming media applications to work on their platforms, putting an end to a spat over video between the two. 

The two said that the official YouTube apps will be available on Amazon’s Fire TV in the upcoming months, allowing users of the Amazon platform to access the music videos, movies, shows and other content from the Google- owned service.

The agreement also enables Amazon Prime members streaming to Chromecast or using Android TV devices to access Amazon’s video content. 

The deal appears to end a spat between the two tech giants that made it difficult or impossible for users of one of the video services to use the platform to access the other’s.

“We are excited to work with Amazon to launch the official YouTube apps on Fire TV devices worldwide,” said Heather Rivera, head of product partnerships at YouTube.

“Bringing our flagship YouTube experience to Amazon Fire TV gives our users even more ways to watch the videos and creators they love.”

Andrew Bennett, head of business development for Prime Video, aid the agreement would “give our customers convenient access to the shows and movies they love… customers will have even more ways to stream what they want, whenever they want, no matter where they are.”

Amazon and Google are in fierce competition over streaming, but their spat had sparked concerns of anti-competitive conduct by locking out an important rival.

The joint statement said Fire TV users will be able to sign in to their existing YouTube account and access their full library of content.

Chromecast users will meanwhile have similar access to the Prime Video catalogue.

Walmart CEO Dough McMillon Seems Impressed With Flipkart’s Tech Prowess

Walmart President and CEO Doug McMillon at his townhall address to Flipkart employees at the Bengaluru headquarters was seemed to be impressed with the company’s technological prowess while emphasising the need of leveraging some of those for the global operations.

McMillon, seen wearing blue jeans and a T-shirt emblazoned with the yellow-and-blue Walmart logo instead of the usual suit and tie, told the employees that as far as the use of technology is concerned, Flipkart is years ahead, compared to what Walmart uses in the US.

He also said that the retail major would like the Flipkart technological knowhow, tools, and processes to be implemented in Walmart’s global offices, said sources.

With Myntra, McMillon was impressed with the way the firm has built up a fashion brand. Walmart is looking forward to collaborating with Myntra and Jabong to help the company build a fashion brand, he added.

McMillon, accompanied by 15 top executives of Walmart, also told the employees that India is a “very big and crucial market” for Walmart, and Flipkart, including the group companies such as PhonePe, Myntra, and Jabong, would play a key role to this effect. The senior executives who spoke to the employees included Dirk Van den Berghe, executive vice-president and regional CEO-Walmart Canada and Asia, and Dan Bartlett, executive vice-president of corporate affairs for Walmart.

According to an employee who attended the session, McMillon was highly appreciative of Flipkart and its other group companies’ ability to take on anyone in this market. He told the employees that they need to remember that each day matters and the impact they are creating is crucial.

Functional reviews or meetings with the business teams were also conducted on the sidelines.

Top India officials such as Flipkart CEO Kalyan Krishnamurthy and Sameer Nigam, CEO of digital payments company PhonePe, were also present at the townhall meeting. Krishnamurthy, who wore a dark blazer, ‘thanked’ McMillon for the support by Walmart for all the Flipkart group companies. He also appreciated Walmart leadership for allowing the group companies such as PhonePe and Myntra-Jabong run independently.

McMillon is also learnt to have appreciated the work done by Flipkart’s payments arm PhonePe, which recently crossed the 2-billion digital payment transaction mark on the app. “He said ‘we want Sameer (Nigam) and team to continue focusing on winning India’,” said the person.

Some employees were also busy taking selfies with the charismatic McMillon, who, in 1984, started out as an hourly summer associate in a Walmart distribution centre and rose through the ranks to become the CEO of the company.

“The mood of the employees was euphoric. He (McMillon) is a very effective communicator, friendly, and a people person,” said a person.

“He is able to motivate people and catch their attention.” The person added that McMillon mentioned that the talent pool at Flipkart was very good.

Most of the questions from the Flipkart employees were around how the collaboration can be improved between the two organisations and how does Walmart see Flipkart fitting into its grand scheme of things.

Besides the townhall meeting, McMillon was seen meeting the senior leadership of Flipkart as well as Myntra and PhonePe through the day and is learnt to have discussed the strategy to take on Walmart’s

US rival Amazon with whom the company is locked in a fierce battle for dominance in India’s online retail market.

Financial services firm Morgan Stanley estimates the Indian online retail market to touch $200 billion by 2028, from about $30 billion last year.

Besides Jeff Bezos-led Amazon, Walmart-owned Flipkart is also facing a threat from Asia’s richest man and the Chairman of Reliance Industries Mukesh Ambani, who is also betting big to grab a slice of the country’s e-commerce pie.

Amazon Invests ₹238 Crore In Amazon Retail India Private Ltd.

Amazon has invested ₹238 crore in its reatil arm Amazon Retail India Private Limited, according to filings available with the RoC. The money has been put in by Amazon’s company in Singapore, Amazon Corporate Holdings. The investment shows that the company is keen to enter the food space in India with ARIPL, which sells groceries and home supplies.

A recent DIPP circular, stating that ecommerce companies founded by foreign firms could not hold stake in distribution companies and source more than 25 percent of products from one distributor, sent the entire ecommerce industry into a tizzy. The circular required ecommerce companies to restructure operations. Everyone wondered how this would impact Amazon Pantry, which was sourcing products from Future Group and More to deliver to customers in under two hours. 

With this fresh infusion, Amazon Retail is poised to take on Grofers and BigBasket, two of the leading players in the food and grocery segment. Grofers recently raised $60 million from Softbank while BigBasket raised $150 million from Alibaba.

The battle for food and grocery

Food and grocery is set to lead the second wave of Indian ecommerce in this decade. The first wave was between 2007 and 2017 when Flipkart dominated the Indian ecommerce industry for several years before Amazon began competing neck to neck over the last three years. However, both the companies were just experimenting with food and focused heavily on books, apparel and electronics.

But, the fight for the Indian palate has just begun. Will Grofers and BigBasket beat Amazon and Flipkart? The market is big enough for everyone because food is a $350 billion dollar market, according to E&Y; only about $20 billion of this market is organised. When it comes to the processed foods industry and food exports from India, the industry size is expected to be $895 billion by 2020 or 2022, according to IBEF.

This infusion of Rs 238 crore by Amazon may seem like an insignificant amount when compared to what Grofers and BigBasket have invested so far. Nevertheless, it means that Amazon means business and will ride on its current network to build its food and grocery arm. And with better deals, the consumer will continue to be king.

Amazon Is Up For Introducing Mobile Ads Against Threat To Google, FB

Amazon is set to bring a new way to grab a part of the $129 billion digital advertising market currently dominated by Google and Facebook:

sell video spots on the e-commerce giant’s smartphone shopping app.

Amazon has been beta testing the ads on Apple’s iOS platform for several months, according to people familiar with the plan.

 

 

A similar product for Google’s Android platform is planned for later this year, said the people, who asked not to be identified because they’re not authorized to share the information publicly.

 

The brief video spots appear in response to search results on the shopping app, valuable space for advertisers since people searching for products on the app have a higher propensity to buy than those scrolling through Facebook or watching videos on Google’s YouTube.

 

Amazon has emerged as a fast-growing challenger in the digital advertising market since it captures 50% of all online sales in the US. Amazon’s digital advertising market share will grow to 8.8 percent this year from 6.8 % in 2018, according to EMarketer. Market-leader Google will see its share slip to 37.2% from 38.2%.

 

Amazon, through a spokeswoman, declined to comment. A spokesman for Google didn’t immediately return a request for comment.

 

Selling more video ads opens a new revenue opportunity for Amazon’s advertising division, which mostly sells space featuring brand logos, product photographs and descriptions that are the equivalent of digital billboards. Video ad spots are similar to television commercials and can deepen the power of promotion. Brands will spend nearly $16 billion on mobile video advertising this year, up 22.6 percent from 2018, according to EMarketer. Advertisers are shifting their spending to follow the growing number of people watching videos on mobile devices and are making brief video snippets to appeal to people on the go. Such ads are common on YouTube and in Facebook streams.

 

For years, Amazon refrained from selling advertising space on its site for fear of disrupting the shopping experience. Instead it used price, product descriptions and consumer reviews to determine which products were most prominent on the page. The site is increasingly a pay-to-play platform, with the top of the page dedicated to the highest bidder, a shift that has helped boost Amazon’s profits.

 

Amazon began adding more product-related video content to the site two years ago to prevent shoppers from defecting to YouTube and Instagram to watch video demonstrations and testimonials from influencers not found on Amazon. Many of those video posts on other platforms feature links to sites other than Amazon where shoppers could buy products. Amazon’s lack of video content revealed a weakness in shopper engagement and product discovery other sites were doing better.

 

The latest mobile video ad push is a continuation of that effort to put more product videos on the platform. Amazon is requiring a $35,000 ad budget to run the spots at 5 cents per view to run the ads for 60 days, one person said. Prices can vary by category and not everyone pays a fixed rate, said another person.

Former PepsiCo CEO Indra Nooyi Joins Amazon’s Board Of Directors

Former PepsiCo CEO Indra Nooyi has joined the e- commerce giant, Amazon’s board of directors. Nooyi had left the post of CEO at PepsiCo in October last year. 

She is the second woman of colour to be in the list of Amazon’s board of Directors. 

Early this month, Starbucks executive Rosalind Brewer joined the Amazon Board.

“We’re thrilled to have elected two new members to our Board of Directors this month. Welcome, Roz Brewer and Indra Nooyi,” Amazon said in its announcement.

Ms. Nooyi will be a member of the audit committee.

She was Pepsico CEO from October 2006 to October 2018, where she also served as the Chairman of its board of directors from May 2007 to February 2019.

She was elected to PepsiCo’s board of directors and became its President and Chief Financial Officer in 2001, and held leadership roles in finance, corporate strategy and development, and strategic planning after joining PepsiCo in 1994.

Ms. Nooyi has served as a director of Schlumberger Limited since April 2015.

Reports Predict Losses Of Amazon & Flipkart Likely To Go Up Due To FDI Policy

Flipkart and Amazon India are predicted to go through higher losses due to the fall in sales and hike in compliance costs after the updated FDI policy for online market, according to reports from Morgan Stanley. While Amazon may suffer double the loss in three years, Walmart could go through a loss of $280 million from Flipkart. 

This comes just as Amazon was able to curb losses in its international unit, where India contributes significantly, from a little over $3 billion in 2017 to $2.1 billion in 2018. But a note by Morgan Stanley MD Brian Nowak, reviewed by TOI, said new regulations could lead Amazon to a wider long-term loss.

“We are paying attention to the long-term impacts of this law (new FDI clarifications) which, in our view, is likely to lead to increased Amazon India investment and larger losses from restructuring its business operations … We would also expect this to lead to higher long-term competition as this law should make it easier for other India-based companies to build and compete in e-commerce,” it added, predicting Amazon’s international business losses could swell to around $4 billion in the next three years.

Dominating The Indian E- commerce, Jeff Bezos- Ambani Face off

Amazon.com and Walmart inc.’s  very plans to dominate the Indian online retail market have been abandoned by political priorities of Prime Minister Narendra Modi due to the fate of the elections.

The upcoming elections to be held in May has significantly increased the influence of local retailers for curbing  growth on the two US Giants. On cue, India this month rolled out constraints on foreign e-commerce players including Amazon and Walmart-owned Flipkart, which together control 70 percent of its online shopping. The tighter rules, aimed at protecting small traders, may end up benefiting the country’s richest man, Mukesh Ambani, who is building a home-grown competitor.

Modi’s Bharatiya Janata Party is still licking its wounds after being trounced in three key recent state polls and a year ago fighting an unexpectedly close contest in Gujarat — Modi’s home state. Among small businesses, which are a traditional support base, the government’s popularity has been eroded by 2016’s surprise cash ban and the subsequent chaotic roll out of a new sales tax.

The rules now bar Amazon and Flipkart Online Services Pvt. Ltd. from owning inventory, and require them to treat all vendors equally, throttling discounts and exclusives — a huge advantage to homegrown companies including Ambani’s new venture. His Reliance Industries Ltd., which owns India’s largest retail chain and third-biggest telecom network, has the potential to evolve into a local version of Amazon or Alibaba Group Holding Ltd., UBS AG said last month.

“Whether serendipitous or not, India’s tightened regulatory regime for online retailers is a huge win for Reliance with its new retail ambitions,” said Sanchit Vir Gogia, chief executive officer of consultancy Greyhound Research. “This could be a field leveler for them.”

Ambani wants his consumer offerings — covering telecom, fiber-to-home broadband, media and entertainment and retail — to contribute nearly as much to the conglomerate’s overall earnings as its bread-and-butter energy and petrochemicals businesses.

He’s fresh from disrupting the nation’s telecom sector, which he entered in 2016 with services so cheap that rivals have quit, merged or gone bankrupt, including a carrier controlled by his younger brother.

Unique Model

On the back of that success, he last year unveiled plans to create a model that combines Reliance’s consumer offerings into a “hybrid, online-to-offline new commerce platform.”

Analysts at UBS predict Reliance can gain market share in new-age retail given its starting point of 280 million telecom subscribers, a broadband offering, extensive content and a web of 10,000 stores nation-wide.

The company also wants to partner with India’s 12 million mom-and-pop shops to create distribution and delivery centers.

Reliance resembles Alibaba in its ability to offer bundled services in a fast-growing, fragmented market with low online penetration, according to UBS.

“In retail/e-commerce, despite competition from well-funded global companies, Reliance’s wide footprint of physical stores along with its omni-channel focus, subscriber reach and regulations governing foreign e-commerce entities,” could help it gain market share, analysts including Mumbai-based Amit Rustagi wrote in a Jan. 24 report.

Representatives for Reliance, Walmart, Amazon and India’s commerce ministry didn’t respond to requests for comment.

Meanwhile, the U. S. retail giants are being curbed in a market where they have committed billion of dollars and, till recently, looked to have already won.

Both will have to cut back on cash-back payments and discounts — a sore point for smaller sellers, who accuse the pair of predatory pricing. To meet rules, the companies have also removed thousands of products from virtual shelves, must redraw contacts with merchants and brands as well as brace for a full-fledged e-commerce policy that is under review.

Flipkart’s losses may rise 20 percent to 25 percent following the changes, according to Morgan Stanley, which said in a report that it didn’t think Walmart was considering walking away from the investment. The world’s largest retailer is “financially and strategically invested in India,” analysts including Simeon Gutman wrote, adding that it may make sense to exit if Walmart can’t see a long-term path to profits.

Other Setbacks

Walmart has suffered other setbacks: During the course of its Flipkart acquisition and soon after, it lost the co-founders of its new purchase. Their know-how and connections would have helped the U. S. retailer better navigate this latest regulatory wrinkle.

Reliance will probably use the opportunity posed by the government’s tighter rules to make a “grand entry” into e-commerce, said Praveen Khandelwal, national secretary general for the Confederation of All India Traders, a lobbying group that had threatened political repercussions if the Feb. 1 rollout was delayed.

Ambani had last month mapped out the beginnings of his strategy, rolling out a shopping platform to 1.2 million store-owners in western India. As the initiative expands, the company will enlist more neighborhood shops as distribution and delivery centers for products that will be available on its mobile platform, people familiar with the plans said at the time.

An integrated platform will probably be launched within 18 months, the people had said.

“Our agenda is to ensure a level playing field,” Khandelwal said. “Players such as Amazon and Walmart are in a major fix post the new guidelines and they will take time to restructure their operations.”

 

Amazon Customers in Dismay- The Site Removes Various Products From India’s Site

India’s new e-commerce investment rules bar online retailers from selling products via vendors in which they have an equity interest, and also from making deals with sellers to sell exclusively on their platforms.

By Thursday, numerous items sold by vendors such as Cloudtail, in which Amazon holds an indirect equity stake, were no longer available on the Amazon India site.

E-commerce rules that went into effect in India on Friday caused widespread disruption for Amazon.com, forcing it to take down an array of items from its India website, including Echo speakers, batteries and floor cleaners.

Two sources with direct knowledge of the matter said the products began to disappear from the Amazon India site late on Thursday as it began complying with the revised norms before a midnight deadline.

“The company has no choice, they are fulfilling a compliance requirement … customers will suffer,” said one of the sources.

In December, India modified foreign direct investment (FDI) rules for its burgeoning e-commerce sector, which has drawn major bets from not only Amazon.com but also the likes of Walmart Inc, which last year bought a majority stake in homegrown e-commerce player Flipkart.

Clothing from Indian department store chain Shopper’s Stop was also no longer available, as Amazon owns 5 percent of the company.

Amazon’s own range of Echo speakers, its Presto-branded home cleaning goods and other Amazon Basics products such as chargers and batteries had also vanished from the website.

Both Amazon and Walmart had lobbied against the latest rules and pushed for a delay in their implementation, but India late on Thursday said the deadline stood.

The situation in India is “a bit fluid right now,” but the country remains a good long-term opportunity, Amazon Chief Financial Officer Brian Olsavsky said on a conference call with reporters following its fourth-quarter earnings announcement.

The company’s main goal is to minimize the impact of the new e-commerce rules on customers and sellers, he added.

The U.S. government has also urged India to protect the investments of the two American retailers, Reuters reported last week.

Both companies have bet heavily on India being a big growth driver: Amazon has committed to investing $5.5 billion there, while Walmart last year spent $16 billion on Flipkart.

But Prime Minister Narendra Modi’s administration is seen as keen to appease small traders in the run-up to a general election due by May.

Many small traders say the e-commerce giants use their buying power and control over inventory from affiliated vendors to create an unfair marketplace where they can offer deep discounts on some products. Such arrangements will be barred under the new policy.

Industry sources have said the new rules will force the big e-sellers t change their business structures, and will raise compliance costs.

Amazon India told Reuters it was “committed to remaining compliant to all the laws of the land”, adding that all sellers make their own independent decisions of what to list and when.

Exclusive deals with sellers will be discontinued, the two sources said.

It is unclear how long the disruption will last. Would-be buyers of Echo speakers on Amazon India saw a message reading: “We don’t know when or if this item will be back in stock.”

The impact of the changes on Flipkart was not clear. It did not immediately respond to a request for comment.

In a letter to India’s industries department in January, Chief Executive Kalyan Krishnamurthy said the rules required Flipkart to assess “all elements” of its business operations and risked causing “significant customer disruption”

India’s New Rules Hurt Amazon and Walmart

Online marketplaces must treat all vendors equally by providing the same terms, India’s trade ministry said Wednesday. In practice, this means barring e-commerce companies from forcing a seller to feature products exclusively on their platforms and limiting ownership or control over the marketplace’s inventory. The government says the changes will promote fair trade and curb foreign companies’ influence in setting domestic prices.

India’s new rules for foreign e-commerce platforms may be designed to protect local companies from Amazon.com Inc. and Walmart Inc., but consumers are likely to suffer the collateral damage.

An employee uses a scanner as he prepares a package for shipment at the Amazon.com Inc fulfillment center in Hyderabad, India. This could mean that platforms offered by e-commerce giants such as Amazon and Walmart’s Flipkart may be prohibited from offering their own goods — such as the Echo smart speaker — at heavy discounts, while allowing rivals the opportunity to sell previously proprietary products.

“Consumers in India will most likely bear the brunt of these changes and be negatively impacted,” said Jennifer Bartashus, a retail industry analyst for Bloomberg Intelligence. “Prices will go up as discounts evaporate, and product options and availability may contract as e-commerce marketplaces strive to remain compliant with the new rules.”

Amazon and Flipkart will make presentations before India’s finance and commerce ministries to contest the new rules, local news channel BTVI said in a Twitter post, citing unidentified people.

The rules could be a blow for the U.S. companies, which are attempting to crack India’s consumer market and capture its growth potential. Amazon lost an estimated $3 billion on its international efforts last year, and analysts believe most of that was in India.

Walmart in May spent $16 billion to acquire Amazon’s primary rival in India, online retailer Flipkart. China’s Alibaba Group Holding Ltd. has a stake in the country’s largest online grocer, BigBasket, and an investment in popular online retailer called Paytm E-commerce Pvt.

Currently, India’s regulation means that foreign investors are prohibited from running online platforms directly, barring them from selling anything other than food directly to consumers.

Foreign investors have circumnavigated this rule by investing in joint ventures with local businesses, and everything on the Amazon.in marketplace is listed by an independent seller.

The new rules are an attempt to stop foreign companies using the existing loophole. Foreign investors that have an equity stake in a platform will also not be permitted to sell their products on it.

The new rules, effective Feb. 1., could help Prime Minister Narendra Modi’s Bharatiya Janata Party win support of local traders — a key voting bloc for the party that suffered defeats in provincial elections this month. The south Asian nation is key to global retailers as it has a billion plus population but only a few million of them own smartphones, offering them the opportunity of exponential growth in online consumption.

“It’s a big achievement after a long struggle,” Praveen Khandelwal, secretary general of Confederation of All India Traders, said in a statement. “If it is implemented in proper spirit, malpractices and predatory pricing policy and deep discounting of e-commerce players will be a matter of past.”

In response to an inquiry from Bloomberg, Walmart’s Flipkart unit said e-commerce has the potential to create millions of jobs for India and any policy changes will have “long-term implications in the evolution of the promising sector.”

“It is important that a broad market-driven framework be developed through a consultative process in order to drive the industry forward,” Flipkart said in an emailed statement.

The new rules will create uncertainty for Flipkart as the company evaluates any strategy changes, Bloomberg Intelligence’s Bartashus said. If foreign players’ ability to offer products at discounted prices is hindered, that could impact sales and profitability, she said.

Ivan Feinseth, an analyst at Tigress Financial Partners, said that the rules are politically motivated and will create higher prices for Indian consumers. The impact will likely be less for big e-commerce players like Amazon and Flipkart, meanwhile, since they already offer products from local merchants and will be able to operate with little or no profits for a while in a bid to gain market share.