No, Jeff Bezos is not coming to India to present a larger-than-life-size cheque to his India Head for the $3 billion he has promised to pump into Amazon India. So says Amit Agarwal, Vice President and India Country Manager, to whom Jeff presented a $2 billion cheque amidst much fanfare when the latter visited India in 2014. On Tuesday, in the presence of Indian Prime Minister Narendra Modi, Jeff announced that the company will boost its India war chest by a further $3 billion.
Amit said in an interaction with YourStory that he will continue to focus on the three pillars on which the company’s India success story has been built. “Our focus is going to be the same - improving customer experience. Consumers care about selection options, low prices and fast, reliable delivery. Sellers care about transparent, fair and predictable platform to sell. On both fronts, things that customers care about are not going to change, even in the course of 20 years,” said Amit.
It is not surprising that Amit continues to focus on doing what Amazon has done in the past. It has worked out well for the company. Reports in April suggested that Amazon India has surged past Snapdeal to become the second largest online marketplace with a market share of over 21 percent. The same report claims that Flipkart’s market share fell to 37 percent, while Snapdeal is now at about 14 percent. However, Amit has a different claim. He said,
From our vantage point, we are already the leader...We have grown 250 percent year-on-year. In Q4 we sold more than the entire year last year. In Q1 of this year, we have grown by 150 percent year-on-yea, despite having a great growth rate last year.
He, however, declined to provide the transaction numbers.
Status of new initiatives
Amazon Now, the two-hour delivery service that the company launched for regular groceries, will be one of the major areas of focus. Amit said their Amazon Now operations, available only in Bengaluru, has grown three times in the past three months. The company intends to expand operations to other cities in the near future. Flipkart recently shut down its hyperlocal grocery operations. Over 10,000 small and medium businesses are using Amazon Business, the wholesale arm operational in Bengaluru.
On investments and acquisitions
Amit said the primarily organic strategy the company has followed has worked well for them. He, however, added, “We are always looking for visionary entrepreneurs and companies to delight customers and will align with our company’s core idea.” Amazon has invested in companies like hyperlocal services venture Housejoy and in online financial services firm BankBazaar.
Mobile on top
Over 75 percent of traffic and over 50 percent of sales on Amazon is through mobile. Also, over 65 percent of orders are from non-tier-I cities. “The one thing about the Indian market that surprised me was just how sophisticated and discerning the Indian consumer-seller environment is at an early age of evolution of e-commerce in India. Sellers are new to online retailing and consumers were also new to online retailing, but the speed at which they’ve got used to the system is great and exciting. This (online retail) has become a national phenomenon,” he said.
Amazon vs Alibaba (and many others)
Amazon’s nemesis in China, Alibaba, has made many aggressive moves in India – investing in Snapdeal and Paytm. There are also many indications that the company will soon launch online retail operations in India. Alibaba is not the only big player that Amazon has to be worried about. The Tatas, Aditya Birla and reliance Industries – all major conglomerates – have also launched online retail operations in recent months. While Amit declined to comment on any of these competitors directly, he said,
Very early for e-commerce in India and for Amazon in India. It is a large market and there will be many winners. Our sole focus is to delight customers and we have a long term outlook. You should expect us to invest aggressively in the market.
The public announcement of the $3 billion investment is a definite shot in the arm for Amazon India. However, competition is only getting tougher and Amazon and Amit cannot afford any missteps as they battle for the e-commerce crown.