Jeff Bezos highlights Amazon India’s Tatkal
In letter to investors, CEO Jeff Bezos points out how Amazon India is persuading wary businessmen to sell goods via Amazon
Bengaluru: Over tea, water and lemon juice, executives at online marketplace Amazon India are wooing tens of thousands of small merchants, training them to sell online, sharing the company’s renowned technology and warehousing expertise and promising the merchants a massive jump in business.
In his annual letter to shareholders, Jeff Bezos, chief executive officer of US-listed Amazon.com Inc., pointed out how the company’s India unit is persuading wary small businessmen across the country to sell their products online through Amazon.
“Last year, we ran a program called Amazon Chai Cart where we deployed three-wheeled mobile carts to navigate in a city’s business districts, serve tea, water and lemon juice to small business owners and teach them about selling online. Through this program and other conversations with sellers, we found out there was a lot of interest in selling online, but that sellers struggled with the belief that the process was time-consuming, tedious and complex. So, we invented Amazon Tatkal, which enables small businesses to get online in less than 60 minutes,” Bezos said in the letter on Tuesday.
Amazon Tatkal, which was launched on 17 February, allows small businesses to get online in less than an hour.
It is a mobile training studio that offers a bunch of online launch tools including seller registration, imaging and cataloguing services and basic training tools. Amazon has reached thousands of sellers in 25 cities since its launch. The e-commerce firm has launched several other programmes to hook sellers to its platform.
Amazon tied up with financial services company Capital First Ltd, which offers loans of Rs.5 lakh to Rs.2 crore to sellers. Last May, the company added some Indian sellers to its global seller programme that allows its third-party merchants to sell ethnic apparel, home furnishings and other goods to Amazon customers in nine international markets, including the US, the UK, Japan and Germany. Now, more than 6,000 sellers in India use Amazon Global Selling.
Amazon India nearly doubled its authorized capital to Rs.16,000 crore in February, exceeding its massive capital commitment of $2 billion made in July 2014 and indicating the company’s intent to splash whatever cash is needed to become the country’s largest e-commerce firm, Mint reported on 4 April.
The firm’s authorized capital was just Rs.1,500 crore in July 2014, when Bezos promised to invest $2 billion in India over the next few years.
Amazon India is stepping up its pace of investment to try and overtake local rivals Flipkart Ltd and Snapdeal (Jasper Infotech Pvt.Ltd), both of which are struggling to raise money.
Amazon is desperate to succeed in India, the last big e-commerce market in the world, after losing out in China to Alibaba Group Holding Ltd. India’s e-commerce sales could reach $48-60 billion by 2020 from $4.47 billion in 2014, according to a UBS report.
Led by Amazon veteran Amit Agarwal, Amazon India launched only in June 2013 and successfully wooed tens of millions of Indian shoppers with low prices, wide product selection and fast delivery.
In India, Amazon operates as a marketplace because of regulations and it is barred from selling directly to customers. The company currently has more than 60,000 third-party sellers who sell all apparel, smartphones, laptops, home appliances and other products to customers. Mint reported on 29 October that Cloudtail India Pvt. Ltd, a joint venture between Amazon.com Inc. and N.R. Narayana Murthy’s Catamaran Ventures, generates at least 40% of Amazon’s sales in some months. Since then, Cloudtail’s share of Amazon’s sales has only risen. That will run afoul of the new rules India has put in place for marketplaces.
Yet, it is important for Amazon to lure other sellers in order to offer the widest variety of products possible and to generate sales through other services such as online advertising and logistics.
The online retailer has launched several logistics-related programmes for sellers such as Fulfilment by Amazon and Amazon Easy Ship. Through these services, Amazon handles part or whole of the process of getting products from sellers to customers. Its latest service is called Seller Flex, in which it trains sellers on improving their warehousing abilities.
“Sellers set aside a part of their warehouse for storing items to be sold on Amazon, and we configure it as a fulfillment center in our network that can receive and fulfill customer orders. Our team provides guidance on warehouse layout, IT and operational infrastructure, and trains the seller on standard operating procedures to be followed onsite,” Bezos said in the letter referred to above.
This year, Amazon.com became the fastest company ever to reach $100 billion in annual sales, Bezos said. Its shares were among the best performing over 2015, partly as investors rewarded the company for disclosing details of its highly profitable cloud business, Amazon Web Services.
Last year, however, Amazon was also the target of a scathing article by The New York Times newspaper, which wrote a detailed story alleging Amazon’s work culture was brutal. The article contained serious allegations by former employees such as Amazon punishing employees who were suffering from serious illnesses and other such episodes that painted Amazon as a cruel and an unsympathetic employer.
While Amazon contested many of the allegations in the report and said it was one-sided, it is clear the company is still dealing with the aftermath of the article.
“A word about corporate cultures: for better or for worse, they are enduring, stable, hard to change. They can be a source of advantage or disadvantage. You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it. It is created slowly over time by the people and by events—by the stories of past success and failure that become a deep part of the company lore,” Bezos wrote in his letter.
He added, “If it’s a distinctive culture, it will fit certain people like a custom-made glove. The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one—just that it’s ours—and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”