interview | Industry

Amazon, Flipkart yet to tap full e-com potential: Colin Bodell

India market is big enough to accommodate those huge firms, says Groupon CTO

As chief technology officer (CTO) of Groupon, Colin Bodell leads the engineering efforts for the U.S-based e-commerce marketplace operator. A former top executive at Amazon, Mr. Bodell says that companies like Walmart-Flipkart, Amazon and start-ups have just scratched the surface of India’s e-commerce opportunity. Edited excerpts

How are you leading technology strategy for Groupon?

I love to build relationships face to face. So for the first six months, I spent time on the road going around meeting the people, learning about the technology... build rapport and relationship with the engineering staff. But also what I was doing during that time was assessing the capability of each of those locations. And what I found is we didn’t have critical mass in some of our development centres, Bengaluru being one and Dublin being another. And, I also found that the capabilities of certain teams in Bengaluru [and] Dublin were really good, like the opportunity to do more work and to leverage not just their software engineering skills, but also their appreciation of the business, commerce, merchandising, and marketing. I wanted to tap into those business skills at the same time...they have the intellectual capacity, I wanted to give them the resource capacity to go and be successful.

What are your plans to hire talent in India?

One of the major reasons I came across was to tell the team that based on all of my travelling around the world and observing what’s going on, I am doubling the size of the organisation here. At the moment, we have about 120 software engineers, within 12 months that will go up to 240. The talent pool that we can tap into, in Bengaluru and other Indian cities is phenomenal. Whenever I see a resume, and I see IIT at the top of it, I say interview that person and not just IITs, but plenty of [other colleges as well]. I’ve been coming to India for the last 25 years and have hired a lot of very talented people… [Also] a very interesting thing happened. One of my software engineering directors from Palo Alto in California came to me and said, because of the growth that you are pursuing in Bengaluru, I want to be part of that..He has decided to come back to India...not to look after aged parents..but to really get engaged in the growth of this office. So now, I’m in the enviable position that I am importing Indian nationals from the U.S into India.

What are your plans to tap India’s

e-commerce market?

Once upon a time, we had Groupon in India and we exited the market. So, at the moment, our presence in the country is [through] engineering [and] product management talent. We’ve consolidated in North America, Europe, and some Asia-Pacific countries [like] Japan, New Zealand and Australia, because of the model of the service commerce. We do sell goods but our main business is individual owners of restaurants [and] hair salons [and] all that service industry. The style of business in North America, Europe and those in Asia PAC countries is very similar. The style of service business in China [and] India is very different. How far people will go to get service, experiences and activities, the amount of percentage of the population with disposable income, the existing relationships that people have with service providers is different in India and in China than it is in those other countries... But we keep looking at all of these markets on a continuous basis.

Was it a good decision for Walmart to acquire Flipkart for $16 billion?

I think it’s an amazingly good thing for them to do. This country will have a population larger than China in another three or four years. The wealth of this country is coming up tremendously [and] the amount of disposable income, Walmart wants to tap into that. Their margins, I believe, are going to be small to start off with as they invest in the country, but they have to do that investment now, otherwise, they [will] see it going to Amazon and other companies. So, you can’t enter a market too late [and] you can enter it too soon [but] you are going to spend an awful lot more money. I think they’ve been astute as to picking the right time and just given their purchasing power [and] understanding of logistics, I think they bring a lot of value. And look, it’s all about the consumer. If I can now pick from an Amazon, Flipkart or Walmart [given the right] selection, that helps drive costs down because these companies will go to a much thinner margin to win new customers. For the consumer that’s amazing. And as more consumers come along, it would force changes in the last mile delivery and in road infrastructure. Communities that have poor infrastructure are going to require that political representatives put more money in the infrastructure so that we can take advantage of this, buy products at a cheaper rate and improve our lives and our education. There’s going to be a big cultural shift, e-commerce is just the tip of that cultural cultural shift iceberg.

Who is going to win this e-commerce war in India, Amazon or Walmart-Flipkart?

I think this market is big enough to have those huge companies like Amazon and Walmart duking it out... that’s beneficial to customers. They are huge players in the U.S. Both companies continue to grow. There are plenty of opportunities [and they] are still only scratching the surface. It’s still very early on the cycle. And again, these entrepreneurial companies [start-ups] that are coming up with low risk and great innovations would come up with other ideas that would either get swallowed up or they’ll grow. I mean Amazon has been [in the business for] 20 years and it is still a very fresh business. Walmart has almost been around a lot longer. But [for a] successful e-commerce business... this is still just a flash… it is a rounding error. Think what we’re going to see in the next 10 years, I can’t even begin to imagine. I do know that I have to lay lots of bets because I can’t predict what’s going to happen. But I know that there are some good bets, little risky bets [and] some of them are going to pay off. But I think the market is huge enough to let these massive companies co-exist for a long time, but also create the space for entrepreneurs…to create some change. What happens at the end is the customers benefit and that is the key thing.

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Printable version | Mar 30, 2020 6:29:40 PM | https://www.thehindu.com/business/Industry/amazon-flipkart-yet-to-tap-full-e-com-potential-colin-bodell/article24962176.ece

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