Amazon India head Amit Agarwal thinks of Sachin Bansal and Binny Bansal as 'missionary entrepreneurs' but criticized Flipkart's strategy of focusing disproportionately on the smartphone category
Bengaluru: Since its launch in June 2013, Amazon India (Amazon Seller Services Pvt. Ltd) has been the biggest threat to market leader Flipkart. Now, Amazon is in a two-way race with rival Walmart Inc. to buy a controlling stake in Flipkart.
In an interview, Amazon India country head Amit Agarwal, who is also one of the senior-most leaders globally at Amazon.com Inc., talked about the company’s plans for the next five years. Agarwal declined to comment on reports of Amazon’s talks with Flipkart but said that if Walmart were to become a Flipkart investor, it will boost the e-commerce market in the country. Agarwal also said that he thinks Sachin Bansal and Binny Bansal, co-founders of Flipkart, were “missionary entrepreneurs" but criticised Flipkart’s strategy of focusing disproportionately on the smartphone category. Edited excerpts:
In the five years that Amazon has been in India, it has established itself as one of the two main e-commerce companies here. What’s the approach for the next five years?
When we entered India, e-commerce was mostly an urban phenomena, with a few people buying and price being the main determinant. Our focus was on offering great selection, value and convenience. What excites me is the evolution of e-commerce in the past five years and our role in that.
When I look at the next five years, it will be about: how do we democratize aspirations, make convenience normal and bring the next 100 million customers to shop with us.
How many users do you have currently?
We have more than 115 million registered users currently. We don’t share our active user base, but it’s in the tens of millions—high double digits.
What are the things Amazon could have done better and what are the things you’d like to change?
We ask that question on a daily basis. We look at customer anecdotes, we look at our customer experience and ask: ‘how do we make sure that our extensive product delivery experience is better?’ I don’t think it’s about something like, ‘is there a business that we wish that we had done?’ One could argue that we should have started fashion sooner. But it doesn’t matter if you look at a 20-year scale such a question would never even figure in that graph. We are getting great traction (in fashion)... On a standalone basis, we are already the largest fashion site but on an aggregated basis we have work to do to catch up.
You’re saying that Amazon has the single-largest fashion business?
Yes. The IMRB data showed that on a standalone basis, we have the largest fashion business in terms of units sold, GMS (gross merchandise sales), customer share.
Some people say that Amazon got complacent in 2016 and let Flipkart off the hook…
We don’t think about competitors that way. I don’t plan my strategy on how it would influence somebody else. The general aggressiveness in the market is normal. India is a long-term market...e-commerce is so small currently; so, there will always be players who will bring in money and that’s good for e-commerce. I would rather have two or three well-funded players going after (expanding the market) than us doing it alone.
So, if Walmart were to get into Flipkart you would consider that to be a positive?
It’s good, it’s good. Given how early India is in the stage of e-commerce, wouldn’t you rather have a lot more investments? I don’t get too emotional about someone’s adversities or someone’s success because our time will also come in one of those two phases. For us to get close to any of the credible markets it’s a long journey. So as long as there are investments, it’s good for everyone.
If you’d rather have 2-3 players then why is Amazon interested in buying Flipkart?
That’s your rumours and speculation. Maybe we should ask Alexa about it! I don’t have any comment on that.
Could you speak about your approach towards investing in startups in India?
You have to trade off in your mind, if there is a missionary entrepreneur out there who’s working on an idea that can accelerate what you’re doing in a meaningful way and can fit into the culture that you have. Or you make an investment where you see that thing converge with what you’re doing and do something with what your core flywheel is all about...We have invested in startups—QwikCilver is a great example, it got our payments thing going. BankBazaar is the kind of investment that hopefully can converge in the future.
Do you consider the Bansals to be missionary entrepreneurs?
Absolutely. I have a great deal of respect for what they’ve built. Not just them, but all the startups that are running, people should be very proud of what they’ve achieved. I consider myself as a missionary entrepreneur as well, even though I’m stuck at one company (laughs).
Flipkart CEO Kalyan Krishnamurthy recently said that by dominating the category of smartphones, one can ensure sustained dominance of the e-commerce business in India. What are your thoughts?
My belief is that you have to serve customers and be relevant for all their needs to drive loyalty... Smartphones is one of them, but we don’t take a category approach, we take a customer-backwards approach. And from that perspective, we are happy with the spread of purchases that customers do on our website and the loyalty that they exhibit. I don’t think you’ll ever have a Prime programme for smartphones, which probably defines the futility of that thinking.
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