Amazon has acquired a startup in India that is helping offline stores go online, the e-commerce group’s latest attempt to make inroads in the world’s second-most populous nation where brick and mortar continue to drive more than 95% of sales.
The American e-commerce group said on Tuesday evening that it has acquired Purple, a four-year-old startup. A regulatory filing showed Amazon Technologies paid $14.7 million to acquire the Indian startup in an all-cash deal. The company is expected to spend an additional $5 million or so to compensate Perpule’s employees.
People, which had raised $6.36 million (per insight platform Tracxn), offers a mobile payments device (point of sale machine) to offline retailers to help them accept digital payments and also establish a presence on various mini-app stores, including those run by Paytm, PhonePe and Google Pay in India.
“People has built an innovative cloud-based POS offering that enables offline stores in India to better manage their inventory, checkout process, and overall customer experience,” an Amazon spokesperson said in a statement.
“We are excited to have the Purple team join us to focus on providing growth opportunities for businesses of all sizes in India while raising the bar of the shopping experience for Indian customers.”
Founded in late 2016, the Indian startup’s first product was focused on helping customers avoid queues at super chains such as Shoppers Stop, Spar Hypermarket, and Big Bazaar. But the development, said Abhinav Pathak in a recent interview, wasn’t scaling, which is when Perpule pivoted.
The Bangalore-based startup — which counts Prime Venture Partners, Kalaari Capital, and Raghunandan G (founder of neobank Zolve) among its investors — has expanded in recent years, launching products like StoreSE enables a business to support group ordering.
Last year, it expanded geographically, bringing its offerings to Southeast Asian markets, including Indonesia, Malaysia, Thailand, Singapore, and Vietnam.
In recent years, Amazon has aggressively engaged with physical stores in India, using its vast presence in the nation to expand its delivery network and warehouses and even just relying on its inventory to drive sales.
The company’s push into physical retail comes as Flipkart, and Reliance Jio Platforms (backed by Facebook and Google), which raised over $20 billion last year, also race to capture this market. The acquisition of Purple comes less than a week after Google backed DotPe, a startup that offers several similar products.
These neighborhood stores offer all kinds of family-run items and pay low wages and little to no rent. According to industry estimates, because they are ubiquitous — there are more than 30 million neighborhood stores in India, no retail giant can offer faster delivery. On top of that, their economics are often better than most of their digital counterparts.