If there was a selection of products on Mars that people cared about and Amazon could build a rocket ship to bring it to the Earth, the world’s largest online retailer would get it, said Amazon India chief Amit Agarwal . Rival firm Flipkart had recently taken a pot-shot at Amazon saying that selling ‘ Churan ’ and ‘ Hing ’ do not make up real sales. In an interview, Mr. Agarwal, who looked dapper in blue jeans and shirt, said that Amazon believed customers should be able to find anything online but that its rivals find shame in selling products that are unique to India.
Edited excerpts:
How successful has Amazon been in cracking India’s e-commerce opportunity?
About 90 per cent of serviceable pin codes placed at least one order (during the recent festive sale). Customers opted for premium delivery and even ‘Prime’ became a top seller. Two big things come out of this; how penetrated Amazon's brand has become and how customers are willing to pay for convenience. These are two important developments that were showcased during this (festival season) which marks an inflection point in e-commerce in India. Popular opinion was that it is a discount-led phenomenon, mostly focused on mobile phones and limited to urban metros and that people would never pay for convenience, that they want free delivery. What I am saying is that we had most of the penetration that we could think of. We sold every kind of item. I think this is a huge inflection point for e-commerce in India.
Where do most of these sales come from in India?
More than 65 per cent (sales) came from tier-two and below (places). And, when we look at our new customers, 70 per cent of them came from tier-two and below. When you look at tier-three cities, (for) the festive sale for five days, the growth was 30 times that of last year. Not only are we penetrating deeply, but the amount of stuff purchased by that cohort is growing at an exponentially faster rate. It indicates that customers love selection, great price and fast delivery. If you go further into remote parts of India, access to selection becomes even more important.
You say Amazon has done in three years what competitors couldn’t achieve in 10 years. What makes you say that?
They (rivals) don't even sell ‘Churan’ and ‘Hing’ in India yet which is sad. An Indian company does not sell ‘Churan’ and ‘Hing’ and complains about it which is very sad. It is shocking. In three years we built India's largest selection of over 80 million products. We sell everything that you can imagine that can be shopped for online. It requires a lot of trust-building for customers to trust you to buy everything. It requires even more trust when they say that I am going to pay you, so that you can ship to me quickly which is so contrary to popular Indian belief of ‘what discount are you giving me?’ The reason I call it as an inflection point for e-commerce in India has to be this. It cannot be buying, once a year, a discounted mobile phone and being done with it. That is not sustainable e-commerce.
Who won the e-commerce game this festive season?
Customers won. With over 15 million units ordered (from Amazon) one out of the three shipments are being shipped as premium, which means that you have (made) such a bold promise to deliver the next day. With Amazon growing at 135 per cent year over year, when the entire landscape is flat or negative in the whole year, it is very natural for us to feel confident that Amazon is a leader. I don't think there is a race. We measure our success based on inputs that customers care about. For us what matters are delighted customers. What these five festive days showed is our ability to showcase those customer experience pillars at a massive scale that India has never seen. This is a big inflection point for e-commerce.
But your rivals say that selling ‘Churan’ and ‘Hing’ is not real sales?
Maybe they (rival firms) don't eat food. Maybe they find shame in selling things that are unique to India. From our perspective, our job is to serve customer needs in India and customers in India buy everything from mobile phone to furniture to every day essentials. Your strategy could be that you want to service a particular need of the customers. Our strategy is that we will service all the needs of the customers.
So you consider Amazon as the leading e-commerce player in India?
No doubt. We believe customers should be able to find anything online. Any focus on a specific category will get you a very small segment of customers to come and shop with you. That is a very simple thought experiment. You go and open up a mobile store, consumer electronics store, general merchandise store and the last store in the line says that you can buy anything. Which store will get the most footfalls? It does not require elevated Einstein logic to figure this out. We are that last kind of store.
How are your ties with select neighbourhood stores working?
It is an India first strategy. We have more than 12,500 - what we call as ‘I have Space’ - pick up and delivery points in tens of cities across the country. Their shipments grew five times versus last year. They have been a big part of the delivering experience to our customers.
What kind of innovation is Amazon developing in India?
We launch a lot of India-first things that can be used globally. ‘I have Space’ was built out of India. ‘Easy Ship’ too was built from India and is now going global. Even global products such as 'Global Store' have a lot of Indian nuances.
