Ten years after entering the complex Indian market, Amazon has firmly entrenched itself deeply not only in the e-commerce segment but also in entertainment, payments, data and cloud services, and streaming music. businessline spoke to Manish Tiwary, Vice President and Country Manager: Consumer Business, Amazon India to understand what’s worked for the company so far and the way forward.
Are you satisfied with where you are as you complete ten years in India or do you think more could have been done?
We have surpassed the expectations in many ways. In its first ten years, Amazon has democratised e-commerce, making it a daily phenomenon for everyone to participate from any part of the country to buy anything they needed. 10 years ago, Amazon.in started as a humble start-up with 100 sellers offering mainly books. Today, we have more than 1.2 million sellers, we employ directly 1 lakh people and enable employment for another 1.1 million, we have enabled exports worth $5 billion which we want to grow to $20 billion, and we have helped over 4 million small businesses to get digitized.
Amazon’s fulfilment centres have grown from 0.22 million cubic feet of storage space to 43 million cubic feet of storage space in 2023 for seller inventory, across 15 States in India. But 10 years feels like the first step in our commitment to India, its still day zero for Amazon in India. E-commerce in India is at a very nascent stage, with about 5 per cent of total retail , there’s so much more to be done.
What have been the learning, given the complexity of the market with its large geography, different languages?
The biggest learning we have had is that this is a country of entrepreneurs. If you want to succeed here, partnerships is critical. The biggest investment for us is the logistics and one of the challenges is the last-mile delivery. Traditionally, we would have had our own delivery associates or we have partner companies that go and delivers. In India, every area has a small store and store owners know everyone in that area, when they are home, they would know the security guards. But these stores do not have sales throughout the day.
We partnered with such neighbourhood stores and today, millions of packets are delivered by them. This is very unique to India, very cost-effective and reliable. Our approach has been different and we have innovated on features like digital kendras , payment on delivery and returns with no questions asked. On the question of the languages, the company introduced Amazon.in in Hindi in 2018 and subsequently in 6 more regional languages. Customers shopping on Amazon.in in regional languages have doubled y-o-y.
What is the roadmap on profitability?
We have an internal roadmap on profitability. But we want to follow a model that is responsible and sustainable. We don’t have external stakeholders who want to drive growth for reasons like valuation. Our stakeholders are patient. The journey so far, has been as per our plan. We feel good about where we have reached.
What are the opportunities you see going forward?
If you look at the global map and someone asks where is the biggest opportunity I would say that India is the biggest opportunity across most sectors. We have grown well, but e-commerce is still very nascent. Marry that with the macroeconomic tailwinds in India’s favour and it becomes super exciting. India has millions of local stores and MSMEs, tens of thousands of start-ups and Amazon remains focused on bringing a vast majority of them online to create national and global brands.
How do you see the competitive landscape with Flipkart and Jio in the play?
When you are a nascent industry, competition is good to drive innovation. E-commerce is still day zero and there’s a long way to go. We would always focus on our customers even as we remain watchful and learn from others.
How critical is having offline presence in India through physical stores given that your deal with Future Retail did not work out?
We have so many physical stores including small and large brands that sell on our platform. I do think omni is a good strategy. Over 2.7 lakh offline retailers and neighbourhood stores across India are selling on Amazon.in.
What is your road map for the next 3-5 years?
I am very focused on reaching the next 100 million customers. I want to reach the 14-15 million stores in this country. We need to innovate to reach these targets. We believe that there are immense opportunities in areas like digital payments, B2B, categories like grocery, fashion, beauty, and possibilities that AI & ML can enable for it to serve our customers and sellers better product discovery, shopping experience and accurate deliveries. There is a lot of innovation ahead and the pace of innovation will be faster than what we have seen so far.
Published on June 1, 2023
