Amazon and Indian investment firm to help small businesses get online

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A worker handles items for delivery at Amazon's new distribution center in Brieselang, near Berlin.

A worker handles items for delivery at Amazon’s new distribution center in Brieselang, near Berlin.

Amazon.com Inc’s Asia unit will provide back-end support in a venture with an Indian private investment firm formed by Infosys Ltd co-founder N.R. Narayana Murthy that aims to help get Indian companies online.

Catamaran Ventures’s partnership with Amazon Asia will target small- and medium-sized firms, Arjun Ramegowda Narayanswamy, who heads the private investment company, said in an email to Reuters on Friday.

Access to mobile devices and better-quality broadband has boosted India’s online shopping scene, where Amazon is jostling with home-grown companies like Flipkart and Snapdeal for market share.

An official from Amazon’s India unit, who did not want to be identified as details of the deal are not public, told Reuters Amazon will support the venture with logistics and technology know-how. He declined to give details.

Online sales of retail goods totaled $2 billion in 2013, according to research firm Forrester. Technopak forecasts sales are expected to reach $76 billion by 2021.

The venture, which is already operational, is expected to help offline sellers and small and medium businesses in India to supply to a fast-growing set of online customers in the country, he said.

Industry surveys say e-commerce could contribute up to 4 percent to India’s economy by 2020 from less than 1 percent now.

India’s Economic Times newspaper first reported the partnership on Thursday.

Catamaran will hold a majority stake in the new company, said Taurus Business And Trade Services Pvt Ltd, the legal name for the partnership that is yet to be branded. Amazon will own the rest as required under India’s foreign direct investment rules, the newspaper reported, citing sources.

A unit of the holding company, likely to be wholly owned by Catamaran to comply with local regulations, will roll out the business, retail consultants said.

An Amazon India spokeswoman declined to comment, while Amazon Asia did not immediately respond to a Reuters query.

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