We will offer global model in India when rules permit: Amit Agarwal

Interview with Country Manager, Amazon India

The $62-billion Amazon, the world’s largest e-commerce company that launched its marketplace model in India three months ago, wants to go full steam to offer its signature international hybrid format in the country, when rules permit. Asked why the company has so far been quiet in India, its country manager, Amit Agarwal, says there was noise in the right channels (read customers). On whether the company aims to beat the physical retail format in sales to become the top player here, he says the aim is to be the earth’s most customer-centric company. Dismissing talks about rivals, Agarwal tells Sudipto Dey and Nivedita Mookerji that nothing else matters as long as a company’s focus is intact. Pointing out it’s still Day One for his company, he repeats Founder & CEO Jeff Bezos — the alarm clock hasn’t gone off yet, even in the US. Excerpts:

Can you give us a sense of Amazon’s India performance three months after the launch in terms of footfall and sales?

It’s been an exciting experience. We can’t share numbers on sales or the people transacting on the site. But we have been able to expand the categories to 11 with toys, baby care and healthcare being the latest. From 100 sellers at the time of launch, we’ve grown to 500 plus now.

You started with 7 million book titles. How many do you have now?

We are currently at 9 million plus titles (a growth of around 28 per cent in three months).

You have indicated you would launch kitchen- and home-ware around Diwali. So how many categories are you likely to have by the end of the year?

We would keep expanding and our goal is to offer the earth’s best collection on the site. Stay tuned for more. As for timeframe, we don’t look at three months or six months. As I have said before, it’s still Day One for us. And to quote Jeff (Bezos), the alarm clock hasn’t gone off yet even in the US.

If foreign direct investment (FDI) is allowed in e-commerce in India, would Amazon offer a first party or inventory-led model in this country, rather than sticking to marketplace?

We have a hybrid model everywhere in the world, except Brazil. In India, because of the regulations, we are offering only marketplace. If regulations allow, our sellers and buyers would both gain from the hybrid model.

So are you open to the idea of having a hybrid model in India?

Yes, if and when the regulation changes.

Globally, what’s the mix of marketplace and inventory-led models at Amazon?

In the first quarter of 2013, about 40 per cent unit sales worldwide were from third parties (marketplace), and 60 per cent from first party (inventory-led model).

Why is Amazon doing things very quietly in India? Even industry tends to think there’s no buzz or noise around the world’s largest e-commerce company in India...

(Smiles) We hope customers would make noise about it. In those channels, we are hearing noise.

When you compare with your rivals, say on books, what’s the cost advantage that Amazon offers?

We don’t determine pricing, the seller does. But, you have to compare the prices….

What does competition look like in India?

All our time goes in focusing on customers, every instant.

Do you have the ambition of becoming the biggest retailer in India, even beating the physical retail chains?

We have the ambition of becoming the earth’s most customer-centric company.

In the US, brick-and-mortar retailers including Walmart are going all out on e-commerce. Even in India, retail chains including Kishore Biyani’s Future Group are doing things around e-commerce. Does that scare Amazon?

E-commerce is still nascent in India and there’s significant room for innovation. The rate of change is healthy. There would be many models and innovations in the future. Many more experiments would be done. As long as our focus is intact, nothing else matters.

Do you have any acquisition plans in this country?

It’s too early to talk about acquisitions. We cannot speculate on that.

There’s much buzz around e-commerce players getting into perishable goods. When is Amazon doing that in India?

Right now, we are focusing on other categories. We cannot speculate on perishable.

Have you seen any impact of the economic slowdown on Amazon sales in India?

We are focused on three key market inputs: broad selection, low prices and more convenience. No matter what the macro economy is like, these inputs are valuable and would not change for decades.

Amazon took more than 10 years to turn profitable globally. By when would Amazon India start making money?

Our goals are around the three inputs — selection, prices and convenience. And we have a very long time horizon. As long as focus is right on the inputs, output (revenue and profitability) would take care of itself.

But surely, Amazon has milestones for the India market. Can you talk about that?

We do have internal milestones and goals that we can’t share.

Even if you won’t share the exact numbers, can you give an indication of Amazon’s share of the non-travel e-commerce sales pie in India?

To be honest, I don’t know that. We don’t even pay attention to that.