Amit Agarwal, Vice President & Country Manager of Amazon India, worked closely with founder Jeff Bezos in Seattle, including a couple of years as his executive assistant and technical shadow. Now the 41-year old Agarwal has among the most challenging jobs in the company - to conquer the highly competitive Indian e-commerce market, where home-grown competitors such as Flipkart, Snapdeal and Jabong are all well-funded by global private equity players eager to have a slice of the second fastest growing market after China.
For Amazon, India is also crucial because it failed to make much headway in China, where the likes of Alibaba dominate the market. He has moved quickly - the company has tied up with over 25,000 merchants in cities across India and is selling over 2.5 crore products on its site, everything from food to fragrances.
In this interview with HuffPost, Agarwal talks about his experience working with Bezos, his key learnings in India and how the company is spending the $2 billion that Amazon has invested in its India business.
1. How closely did you work with Jeff Bezos before coming to India?
I worked as Jeff’s Technical Advisor in Seattle from 2007 – 2009. They were very exciting years. It was great to see from close quarters and imbibe Jeff’s passion for innovation, strategic thinking and relentless focus on enhancing customer experience. (Technical advisors work side by side with Jeff Bezos and are then selected to take on some of the most critical roles at Amazon.)
2. How would you evaluate the Indian market in terms of competitiveness compared with China or the United States?
The Indian e-commerce space is still at a very nascent stage with significant potential for innovation and growth. We believe growth is at an inflection point and there is a tremendous opportunity. We believe there is room for multiple formats, players and most importantly, for innovation. For us it’s still ‘Day 1’ in India. We have just got started.
3. What has been your biggest learning experience since arriving in India to run Amazon?
A global learning that we have is that India as a market is no different. Even though e-commerce in India is new, the customers are as evolved as anywhere else globally. They care about selection, low prices and fast and reliable delivery. Likewise, the small and medium sellers’ base here in India is as evolved in their thinking as anywhere else in the world, even though they are new to online retail. They care about sales, profitability and a fair and transparent platform to operate. Specifically as a market, I would say India is definitely much further along the mobile adoption curve than we thought it would be.
The good part is we were the first player in the e-commerce space to launch a mobile app on Android back in 2013. We have always been serving customers across all access points. But the speed at which we have seen, in over 8 quarters, to go from 0 to about 60% of the traffic coming via mobiles must be the fastest ramp up that we have ever seen. In India, mobile is definitely an important access point but I don’t believe it is the only access point.
Another key learning is that the SME base is a key part of the online ecosystem. Our success with pilots like Amazon Pickup, KiranaNow and AmazonBusiness.in shows that when we make them inclusive, it creates better value for the sellers, customers and for us as a company. So we are very excited with the response to such pilots so far and going forward, you will see us doing a lot more experiments in this area of enabling SMEs.
4. You can only be a marketplace in India as of now. Mr. Bezos had meetings with Modi and other senior government politicians when he was here. Can we expect FDI to be allowed in e-commerce? In which ways is the e-commerce environment in the United States more conducive to business than in India? What changes you would suggest the Indian government to make?
The US has a matured ecosystem for e-commerce. India is still very nascent yet growing very fast. A lot more innovation is ahead of us than what we have witnessed over the past decade in India. We look forward to a scenario where the laws evolve to keep pace with the new-age online business models in order to enable a faster, convenient and nationwide access to customers for sellers, especially small and medium businesses, at significantly low costs.
It would be good to see how the interstate movements of goods can be made less cumbersome. Goods and service tax (GST) is a great example of something that could enable that, that could make it easier for the small medium sellers and manufacturers to move their goods which today is cumbersome. You can make payment regulations that make it very easier for customers to pay. We are focused on enabling sellers in India to get online and sell to customers nationwide and even globally at lower costs.
We have always maintained that opening up this sector to FDI will be good for consumers and Indian businesses as it would allow us to partner with local manufacturers to source products not carried by other sellers on the marketplace, and support the Make in India vision of PM Modi.
5. If FDI is allowed at some point, would you then shift to an inventory-led model?
We have always maintained that opening up this sector to FDI will be good for consumers and Indian businesses as it would allow us to partner with local manufacturers to source products not carried by other sellers on the marketplace, and support the Make in India and Digital India vision of PM Modi.
6. Amazon announced investment of $2 billion in India. That is obviously a very significant number. What areas would you broadly use it for?
Broadly, we are investing in all the areas that can help improve customer and seller experience. Our pace of investments is fast and we will never hold back on investments to do what we have set out to do. We now have 11 Fulfillment Centers in India across 8 states with a storage space ranging from 2.5 – 3 million cubic sq. ft. You should see us expand this aggressively as we roll out more FBA capabilities for our sellers nationwide. We are also investing in technology, processes and capabilities to deliver products faster to our customers and forging strategic partnerships with some iconic companies in India to deliver a great customer experience.
7. This would require more hiring and talent. From where do you hire, and will that process accelerate?
We have been hiring from IITs, IIMs, ISB and many other engineering colleges and B-schools for quite some time and Amazon is one of the preferred employers of choice in majority of them. Candidates from India’s leading engineering institutes and business schools form a major part of the talent pool at Amazon in India. We firmly believe that as we expand and grow in the country, talented engineers and MBAs from these institutes will play an instrumental role in driving Amazon’s growth in India. We continue to be aggressive in our hiring outlook as we scale up our operations in India in our endeavor to be India’s most customer-centric company.
Amazon has been in India since 2004 and we have a long term commitment to the country. Our employee base in India serves both our Indian and global operations and has grown by 48% in 2014 compared to the previous year.
E-commerce is still in its nascent stages in India and has been largely industry-agnostic when it comes to hiring talent. We have been hiring experienced people from FMCG, offline retail and other sectors like shipping and logistics at Amazon India and they have been adding tremendous value to our business.
8. Recently Kishore Biyani said that e-commerce should follow the same rules as brick-and-mortar retailers. Snapdeal's Kunal Bahl said in reply that that's not fair, because his company is a technology company that brings buyers and sellers together. In that context, how would describe Amazon India - an e-commerce company or a tech company?
At Amazon India, our vision is to be India’s most customer-centric company and transform the way India shops and the way India sells. We are working towards building a destination where customers find, discover and buy anything that they wish to buy online and thus providing them wide selection, at competitive prices and fast & reliable delivery that results in a delightful shopping experience every time they shop on Amazon.in. We are customer- obsessed and work backwards from customer needs and invent on their behalf.