 "Russell Grandinetti, Senior Vice-President, International Consumer at Amazon")
Amazon, at the fourth edition of its flagship Smbhav Summit in New Delhi on Thursday, signed a memorandum of understanding (MoU) with India Post for an integrated cross-border logistics solution to boost Indian exports.It is also among the first e-commerce companies to leverage the Railways’ Dedicated Freight Corridor (DFC) for faster delivery of products. Russell Grandinetti, Senior Vice President, International Consumer at Amazon, spoke to Aryaman Gupta and Nivedita Mookerji about the e-commerce major’s 10-year journey in India, regulatory hurdles, geopolitical narrative, the upcoming festival season and more. Edited excerpts:
What benefits do you expect from the MoU with India Post and partnership with Railways’ DFC?
With our new announcements, the interests of our business, the consumers, and our small and medium business partners are aligned. Everybody wins when our ability to transport goods around the country becomes cheaper, faster and more reliable. We have long had partnerships with the Railways but the ability to use these freight corridors to add to the speed, cost and reliability, will be great for us. This feeds into the India Post announcement, where we want to help improve the speed and scale at which Indian businesses can reach customers not just in India but across the world. We are in the early innings of this but Amazon may be the best positioned company in the world to enable this particular service…. Not only do we have a substantial business here in connection with crores of sellers, but we also have customers in various countries across the world…. Within this year, we will surpass $8 billion in cumulative exports. Our goal is to grow that to $20 billion by 2025.
Do you expect these partnerships to give Amazon an edge over its competition?
Our competition is regular retail…. E-commerce has come a long way but it is still a very small percentage of overall sales in India. Our goal is to offer faster, cheaper, more reliable supply and movement of goods for sellers. If we are lucky, this will differentiate Amazon as a business….
How has the 10-year journey been for Amazon in India, especially with reference to the regulatory challenges you have faced in the country?
There has been a lot of regulatory change in India, which sometimes creates transitions that businesses have to adapt to. But we feel that, in India, and many places around the world, citizens want the convenience that digital services, and online commerce in particular, can provide. They want the jobs that get created, and the economic growth that comes with allowing businesses to seek new customers. And the country is simply trying to build a regulatory regime that can shape that, and get the outcome it wants for citizens. A lot of times, our vision and the government’s vision for achieving that are aligned, but there are times we differ. However, we share far more goals with governments than we differ on. …. We are very pleased with the growth of our business and we feel very optimistic about the next 10 years. The regulatory environment, whether we are talking about Europe, India, or the US, continues to evolve in a way that is mostly allowing the business to move ahead.
What’s your expectation from the festival season sales this year?
Every year in India, we expect all of our holidays to be bigger than the past year. We feel very confident about that, given that the number of sellers we are working with continues to grow well, and the number of customers and our traffic continue to grow. Our Prime Day sale this year was the biggest we have ever had. And this will be the best Diwali we have ever had.
How has the geopolitical tension around the world impacted Amazon’s business?
It helps our business when it is easier to move our goods across borders. Notwithstanding any of the geopolitical debates across the world, it still is in India’s interest to make it easier for goods to get from India to the rest of the world. For the most part, most of our business across the world is domestic, within each country, which acts as a bit of an insulator. However, if there are barriers put up to trade between countries which makes it more expensive to cross borders, it is something we would like to avoid.
Have the recent restrictions on laptop imports hurt the business?
We always want to figure out how to give customers a wider selection, no matter where the products are made. We are still able to offer customers a wide selection from products made here, or made in other parts of the world from where we can import things. We may not always agree with a government policy, so we adapt our business but of course we follow the regulations, and then, within that constraint, try to figure out how we can get customers the best possible selection of laptops.
How close are you on the profitability front?
Our focus on profitability is not any different now than it was four or five years ago. One thing that has happened in the last few years, which has been a challenge, is the explosion in demand for e-commerce during the pandemic. For us to scale up very quickly to meet that demand, there was a lot of on-the-fly adaptation in a very short period of time. And at our scale, both in India and across the world, it put a lot of stress on the business…. Over the last six to nine months, we have had to make a number of hard decisions at the company about how to improve our cost structures in the wake of all these changes. And the greenshoots can be seen in our Q1 and Q2 results in 2023, which sets us up well for the second half of 2023, going into 2024 and beyond…. The businesses that we have had longest, in the US, Europe and Japan, are matured and profitable and are functioning really well. In emerging markets, we expect slow and sustained investment. As time has gone on, some of our expectations about how large the opportunity is in India has grown quite substantially. This, in turn, makes us more willing to make larger investments. And we feel very good about the long-term prospects of our business in India.
Where really is India placed in the Amazon universe?
India is one of the fastest growing markets for us and is among the largest opportunities in terms of countries that we have. During our boardroom meetings, India figures quite frequently and quite prominently. The country has grown in our estimation of what we think is possible here.
What are some of your growth and investment targets in the near future?
We are aiming to invest $15 billion in India by 2030, which will take our cumulative investments here to $26 billion. As much as $12.7 billion of this will be invested through AWS (Amazon Web Services). By 2025, we plan to create 2 million direct and indirect jobs, and digitise 10 million small and medium businesses.
Amazon’s back to office directive has been in the news… Is there a change in the company policy?
We are asking employees in most jobs to come to office three days in office—that is hybrid work…. Our company culture is focused on customers, high standards, frugality….. Whether it’s for a product idea or a business decision, interactions are necessary. To be able to succeed, you need to teach.… That’s an important piece for Amazon. It’s very tough to teach over video… An overwhelming majority want to move back to office, and we are making a decision on what’s the best way to work.
Are the job cuts, witnessed earlier this year, behind us?
We made a number of job cuts earlier. Those were difficult decisions. I believe there will be no significant job cuts anytime now.
How’s the working style of CEO Andy Jassy different from that of Jeff Bezos?
Everybody has his or her own personality. I’m quite reuctant to speak about them…. I have worked with both for around 25 years. As far as their vision for Amazon goes, there’s no daylight between them. Andy has a long- term view of things and is customer-focussed… The continuity level is very high.
