Amazon’s steady march to roll out instant checkout stores with Amazon Go in the US and UK has been well documented. It is much less well known that he was also taking some steps to spread the technology in another very important market for the business: India.
TechCrunch has revealed that Amazon has quietly picked up the founders of a checkout-free commerce startup in southern India, hired at least 100 more people to bolster the effort and is still hiring more to expand the team even more.
Employees included support and software engineers, embedded systems specialists, computer vision scientists and program managers, who now list on their LinkedIn profiles as working on Amazon Go in the country. Amazon’s current recruiting posts suggest the company is bringing in even more to join the effort.
Amazon has set up Just Walk Out technology operations units in cities like Delhi, Hyderabad and Chennai to work extensively on Amazon Go stores. Those operations are bolstered by what appears to be a quiet acquisition the Seattle-based company made of Nayasale Retail, the parent of a startup called Watasale. Watasale is/was a Kochi, Kerala-based startup that claimed to be India’s first Amazon Go-style cashier-less store, launched in the southern Indian state in January 2018.
Watasale employees have joined Amazon, but it’s not entirely clear whether Amazon “acquired” or “acquired” the business. Watasale’s website is still up and running, although a few links (like their app on Google Play and an explanation of how their technology actually works) appear to be no longer active.
The site points to many different technologies that are built around the idea of automated billing. He notes that the startup developed technology to operate “microstores”: vending machines that worked with smartphones and QR codes that could be placed in any store.
It was also working on larger store-wide implementations that, according to the site, used cameras and computer vision and “sensor fusion” to understand customer actions, along with big data analytics and deep learning to gain in-store insights. consumer behavior, with the idea of building more complete pictures around buying patterns that would be more complicated (if not impossible) to verify in more traditional buying environments.
In both scenarios, Watasale’s technology allows customers to select items and automatically charge and pay for them via a prepaid wallet – all handled by Watasale, without the need for a cashier or checkout process.
Watasale has also apparently been working on more technology, including delivery services powered by robots. Automated Delivery, it said on its website, was a “fully autonomous, first-class online delivery concept” in which orders from Watasale stores would be sent by robots to a nearby requested location.
“We use a combination of touch sensors, artificial intelligence and computer vision – almost the same technology as a self-driving car,” said Richu Jose, Watasale’s chief operating officer at the time, in an interview published in Indian publication StartupTalky. The startup actually started working on its technology in 2015, before the launch of Amazon Go, but it seemed to give the e-commerce giant credit for essentially confirming its hunch that the area was worth pursuing.
“We started working on the technology in early 2015,” Subhash Sasidharakurup, who served as CEO and CTO of Watasale, said in the same interview. “It was after Amazon’s announcement that it would [launch] Amazon Go, similar to our technology, which we have re-established in our right direction.”
In January 2020, Jose, Sasidharakurup and another director of Watasale, Subhash Shanoop Sivadas, joined Amazon, according to their LinkedIn profiles. Two other directors of the US-based startup, Dileep Elipe Jacob and Vinci George Mathews, left the board in December 2021, according to filings with India’s regulator Registrar of Companies.
Amazon and Watasale executives did not respond to requests for comment on what exactly Amazon bought here, but on January 31, 2022, Nayasale Retail asked the Registrar of Companies to remove its name from official records under Section 248(2) of the Companies Act from 2013, show the documents. The same records seem to show that the company itself was started.
A source told TechCrunch that employees at the startup were given the option to join Amazon and work with the team building the technology behind Amazon Go stores. But it’s unclear whether this will be building the technology for stores in existing Go markets like the US and UK, or for India; nor is it clear what the time might be for the release if it is the last of them.
Introduced in beta in 2016, Amazon Go first launched in Seattle. The company later expanded the partially automated stores to other parts of the US, including Chicago, San Francisco and New York, as well as London. In 2020, it also began selling its checkout-free technology to other retailers.
While Amazon has scaled back part of its brick-and-mortar retail strategy, it appears to be doubling down on stores built around its cutting-edge checkout-less technology. There are currently 28 Go’s in the US alone, with two Starbucks Pickup stores with Amazon Go launched last November.
Opening brick-and-mortar stores is a logical extension of Amazon’s larger presence in India, where it has invested more than $6.5 billion to expand its presence in the country.
While e-commerce is definitely on the rise in the tech-savvy and mobile-friendly country, brick-and-mortar retail remains big business. IBEF, citing data from Payoneer, estimates that e-commerce accounted for 4% of retail sales of food and non-food products in 2020, and that this number would increase to just 8% by 2025.
That leaves a lot on the table for physical trading. To that end, Amazon has aggressively explored partnerships with neighborhood stores in recent years. It’s a long gamble for the company, however. A report by investment firm Sanford C. Bernstein last month said Amazon’s spending on growth in India made its local division’s profit prospects “illusory.”
And Amazon faces an uphill battle from Walmart-owned Flipkart, as well as Mukesh Ambani’s Reliance Retail, which has been expanding recently and outbid the US company’s bid to take over India’s second-biggest retailer, Future Retail.
However, Amazon is working hard to increase its presence in the country, which is expected to double its e-commerce spending to more than $130 billion by 2025, according to Bernstein estimates.
In addition to establishing partnerships with neighborhood stores, Amazon has also acquired stakes in brick-and-mortar retail chains in the country in recent years.
In 2018, Amazon and private equity firm Samara Capital acquired food and grocery retail chain More from Aditya Birla Group to enter offline retail in the country. The American company’s investment arm also bought a 5% stake (PDF) in the Shoppers Stop department store chain in 2017. However, it is unclear whether any of the measures have helped Amazon make inroads among consumers who do most of their spending in brick-and-mortar stores.
Ankur Bisen, senior partner and head of retail, consumer products and food and services at consultancy firm Technopak, told TechCrunch that the way the Indian ecosystem evolves socially, politically, politically and politically determines many of the decisions Amazon makes.
His estimates are slightly better than IBEF’s: up to 85% of the country’s retail sector is still brick-and-mortar, he said. Nothing has affected the viability of neighborhood shops in the country so far, he added.