Amit Agarwal: Making Amazon amazing
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If Amit Agarwal, 42, had decided to pursue his initial ambition of becoming a primary-school teacher and starting his own school, the landscape of India’s booming e-commerce business may have looked a little different.
For it’s possible that Flipkart, the Indian e-commerce juggernaut, would have continued to enjoy a monopoly over India’s $15 billion (around Rs98,000 crore) e-commerce market. The Tiger Global Management-fuelled funding frenzy that gripped India’s nascent start-up ecosystem during 2014 and the better part of 2015 may have lasted longer and Indian “unicorn” start-ups with frothy valuations may have never witnessed a reckoning.
Instead, India’s consumer Internet business witnessed the staggering rise of Amazon, and a chain of events that led to a correction in the valuations of Internet businesses in the country.
Spearheading Amazon’s multi-billion-dollar bet on India was Agarwal, who has been with the company for 18 years, having joined the Internet behemoth after a friend at Stanford prodded him to.
“Teaching was always the career (I had) in mind. I landed up here by accident,” says Agarwal, country manager at Amazon India, who has just got promoted to global senior vice-president.
Agarwal joined Amazon in 1999 in Seattle, at a time when it was only selling books. Since then he has been part of almost every single large bet that the retailer has made—starting from Amazon’s core online marketplace business to Amazon Web Services (AWS, the company’s cloud-computing business), to Amazon’s march into India.
Even by Amazon’s exacting benchmarks, Agarwal’s career trajectory stands out—he is one of the youngest members of Amazon chief executive officer (CEO) Jeff Bezos’ core team of top executives and insiders believe he is being groomed for a bigger role.
I’m meeting Agarwal early evening on a weekday at the five-star Sheraton Grand, which overlooks Amazon’s India headquarters in a towering skyscraper in west Bengaluru. Dressed in a fitted mauve shirt, dark blue jeans and casual Italian leather shoes, he appears media-savvy and articulate.
As we order green tea, Agarwal tells me how he came to join Amazon. “When I was at Stanford (studying computer science), pretty much every adviser that you wanted to work with was working with a start-up.” Google started in a basement; you could see Yahoo and other start-ups on campus. So it seemed logical to join one of these places, he says.
Agarwal hails from Mumbai, where his father worked as a chemical engineer. He cracked the Joint Entrance Exam and had the option of going to the Indian Institute of Technology, Bombay, which was close to his house. He chose IIT, Kanpur, instead. Stanford and Amazon followed.
It was during his early days at Amazon that Agarwal met his future wife, an architect. They married in 2003, shortly before Agarwal returned to India to head the AWS team. The couple have an 11-year-old daughter and a six-year-old son.
Before joining Amazon, Agarwal had dabbled in a couple of early-stage technology ventures—starting off at Cambridge Technology Partners in Silicon Valley and moving to Informatica (also in the valley) a few months later. But he began to grow restless “sitting in a corner, writing codes”. Amazon had approached him a couple of times, and when it did so again, Agarwal decided it was time to move.
Unusually, he says his love for mountaineering made the decision easier. “It was a phase of my life when I wanted to be in the outdoors and I wanted to hike, so I thought Seattle was a good place. So, I was like, if Amazon is going to pay me to get to Seattle, let me join the company. That’s how I landed up at Amazon,” says Agarwal.
He started working at Amazon as a programmer in a team that would eventually roll out Amazon’s now famous online marketplace.
As fate would have it, his first proper face-to-face meeting with Bezos happened within a year of his joining the company. “I had an idea and I don’t know why, but I sent an email to Jeff, saying I wanted to discuss it with him,” says Agarwal. Bezos replied immediately, saying, “Come down in 15 minutes and tell me what the idea is.”
It was about creating an online rental marketplace. “Now I would think differently about that idea—but the fact that he was so supportive and humble about it was very touching,” says Agarwal.
He worked in the marketplace team for five years before moving on to Amazon’s highest-margin business till date, AWS. In 2004, Agarwal shifted to India to lead what was one of AWS’ first teams, technically starting Amazon’s journey in the country.
The project, shrouded in secrecy, was code-named “Subway”—a reference to the fact that it was a payments system that allowed machines to pay each other, a core part of billing at AWS. Three years later, he moved back to Seattle as technical adviser to Bezos, when Kindle was being launched.
His biggest role till date, however, has been to lead Amazon’s push into India, which is expected to become a $50 billion e-commerce market over the next five years.
When Amazon first launched operations here in June 2013, not many expected it to pose a serious challenge to Flipkart. Even smaller rival Snapdeal was gaining investor traction. To put it simply, many expected Amazon to meet the same fate it had in China, where it came off second-best to Alibaba.
How wrong the critics would prove to be.
In July 2014, a day after Flipkart announced that it had raised $1 billion, Bezos committed to investing $2 billion in the India business.
Amazon grew at a faster pace during the last quarter of 2015 than it had in all of 2014. Sales at Flipkart began stagnating—for at least six months since November 2015, its monthly sales remained flat. In fact, Amazon briefly overtook Flipkart’s monthly sales on a stand-alone basis in mid-2016—Flipkart did about Rs2,100 crore in monthly sales in both July and August, while Amazon’s numbers were just a little over Rs2,100 crore, driven by strategically timed discounts and a sale event.
Under Agarwal, Amazon launched initiatives such as Chai Cart, deploying three-wheeled mobile carts to navigate a city, serve tea, water and lemon juice to small business owners and teach them about selling online; introduced cash on delivery; and began Project Udaan, which aims to teach offline shoppers how to shop online through Internet-equipped physical stores.
“If you had told me that this is where we would be in three-and-a-half years, I think we would have had people laugh at us. It’s unbelievable for anybody out there,” says Agarwal.
Fortunes change quickly in the e-commerce business, however. Amazon has continued to grow strongly over the past year, but Flipkart too has witnessed an upswing in fortunes over the last six months, reclaiming its pole position during the Diwali festive season sale when it pulled in monthly sales of Rs5,000 crore, about 10% higher than Amazon’s numbers in October.
“Each quarter is like a year,” agrees Agarwal.
It’s almost 7pm, and Agarwal is restless. His day starts early—he wakes up by 5.30am to go for a run. “I try to spend whatever time is left with family. My office knows that when it’s 6pm, it’s hard to hold me back,” he says.
I try to prod him into talking about Amazon’s intense, even public, rivalry with Flipkart. After the Diwali sale in October, Flipkart’s then CEO Binny Bansal had said the American retailer had inflated sales by including low-priced items such as hing (asafoetida) and churan (digestive powder). A couple of days later, Agarwal responded, saying Amazon had accomplished in three years what Flipkart hadn’t, though it had launched earlier and acquired companies such as Myntra and Jabong.
“I’m a runner. When you run (a marathon), you don’t check after 10m and see if you’re ahead. If you do, then it’s going to be a very long race for you because you might trip,” says Agarwal. “You can’t get satisfied or depressed with a relative metric.”
I ask him if he ever regrets not becoming a schoolteacher.
“You’re saying this as if I’m about to retire. We’ll get to it (teaching). Let’s make India big and then we’ll get to it,” he quips.