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Amazon’s product missteps risk hurting its India business-NewsCO

January 29, 2017

A series of missteps threatens to hurt Amazon in one of the fastest growing markets in the world.

After pouring more than $5 billion dollars into India over the past three years, the company has run into trouble in recent weeks for selling products that have angered many Indians.

Two weeks ago, Amazon (AMZN, Tech30) was forced into a hasty apology for selling a doormat bearing the Indian flag. Then the company found itself in hot water over flip-flops carrying the image of iconic freedom fighter Mahatma Gandhi.

In both cases, senior Indian government officials made their annoyance public.

Amazon is battling local rivals for a bigger share of the promising Indian market, and the damage to its image risks derailing its progress.

“Amazon needs to take a step back and really try and understand the culture and behavior of consumers in India,” said Miriam Burt, vice president of research for retail at Gartner.

A rising sense of Indian patriotism and nationalism fueled by the party of Prime Minister Narendra Modi means foreign firms need to tread even more carefully, Burt said.

“Amazon has grown very quickly in India, but if they don’t quickly come to grips with the culture… then their long term viability will be compromised,” she said.

A third controversy in less than two weeks has already arisen. Pictures of a skateboard bearing the Hindu god Ganesha began doing the rounds last week, sparking more outrage from Indians at home and abroad.

amazon india ganesha skateboard
A screenshot of the skateboard bearing Hindu god Ganesha on Amazon. The product has since been removed.

“The skateboard is used with your feet,” Ajay Jagga, a lawyer in the Indian city of Chandigarh, told CNNMoney. “If you keep the picture of Lord Ganesha then it hurts the sentiments of the people.”

Jagga has written a letter to the Indian government calling for legal action to be taken against Amazon.

amazon jeff bezos india
Amazon CEO Jeff Bezos has his sights set on India.

The Universal Society of Hinduism, based in Nevada, has demanded an apology from CEO Jeff Bezos, and highlighted other products — such as cigarette cases and bedsheets — that also depict Hindu deities and are still being sold in the U.S.

Related: Amazon says it will create 100,000 U.S. jobs

Burt said India’s increasingly social-media savvy nationalists are able to hit Amazon where it hurts.

“The combined total of millennials and [teens] in India is more than 50% of the population,” she said. “It is they who will punch above their weight in shaping how retailers fare in India in the long term.”

That view is supported by the angry tweets and one-star reviews quickly racked up by offending items like the doormat and the Ganesha skateboard:

“Amazon shame on you… If you can’t respect our god, you can’t even be in India,” an anonymous reviewer wrote.

“I boycott you from this moment,” wrote another.

amazon india outrage reviews
Products on Amazon deemed offensive to Indians are quickly flooded with negative reviews.

For now, the Seattle-based retail giant appears content to ride out the storm — an Amazon spokesperson said the offending products have been removed and the company has no further comment.

But repeated misjudgments may do sustained damage to its reputation in a market where it needs to succeed.

“Amazon could be on thin ice here,” Burt said. “They need to really make sure this doesn’t happen again.”

26 January 2017 | 5:54 pm

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