‘Amazon’s focus is on building long-term customer trust’

Amazon has so far committed about $6.5 billion of investment into its e-commerce business in India, has over 1.2 million sellers on the platform, and enabled cumulative exports worth $5 billion. Currently, Amazon India and Flipkart dominate the online retail market with about 60% share between them, but that could change with the entry of Reliance Industries Ltd. In an interview, Amazon India vice-president and country manager Manish Tiwary spoke about the journey in setting up the e-commerce business, challenges and future growth potential. Edited excerpts:

How has the India e-commerce journey been unique for Amazon?

It’s been quite a journey. This was not a worldwide playbook that could have been applied to India. The team had to innovate for India and we had to create trust. Payment on delivery, for instance, was something Amazon had not done anywhere else. We used to have a different version of the app for places where phone network was not good. We started with one warehouse and 100 sellers in 2013, and we now have 43 million cubic feet of storage space in 15 states. So we are excited about what we have done but more excited about what we can do. Today there are multiple players in the ecosystem, but somewhere Amazon created that foundation.

As competition toughens in e-commerce, how would Amazon create a differentiated edge over others?

It’s still early days for e-commerce, and penetration in most categories is still very low. I don’t worry about that too much. Amazon as a company doesn’t overpromise and under-deliver, and we always focus on building long-term customer trust. We wanted to be the ‘everything store for everyone’, and customer trust has been the biggest thing to do that. In any sector, like in auto or telecom, more number of players just makes it healthier. Right now, there are many horizontal and vertical marketplaces, which is good. There is so much innovation and focus on customer experience. Sometimes, people call us a digital company, but our business is largely physical, enabled by technology.

What are the growth categories you are exploring?

Amazon Business, our B2B (business-to-business) marketplace has been scaled up, but the opportunity in B2B in India is big. Right now, Amazon Business is trying to bring together quality B2B sellers and buyers. Similarly, pharmacy is a huge business and we have tied up with Apollo Hospitals for this, where they have the domain expertise and we have delivery expertise.

Once you have 100 million customers, you want to reach the next 100-200 million customers, and social commerce was an obvious choice. We acquired (reseller platform) Glow Road and in 6-7 months, it has grown and scaled really well. We refurbished and relaunched Amazon Fresh, with a focus on fruits and vegetables and to address full basket needs of customers. It’s getting a lot of traction now, but grocery is a difficult business. People talk about quick commerce and other things, but we need to do it sustainably and thoughtfully.

There are categories like fashion, which we have been doing since 2013 but the penetration of online in the category would be 1-2%. So there is huge headroom for growth there, just like home and kitchen.

In November, Amazon India shut down certain business verticals and there were also layoffs. Has that process been streamlined or is more expected?

All these are continuous processes, and they are never a one-time thing. If you do things incrementally, nine out of ten times, it may succeed. But for new things, some may not work. We think of it as a portfolio. For instance, we scaled up Amazon Business because it worked. We will never stop experimenting with new things and businesses.

It’s never about just new ideas but what’s good for customers. So we have to keep on improving selection through sellers, getting more sellers, making the business so streamlined that they get the best value, and focus on convenience.

In fashion, we will have to work hard to get customers to buy more and acquire new customers too. We have just launched a store which is for Gen Z fashion collection. We have a lot of work to do in grocery and want to double down on Amazon Business. Ten years is just the start, there’s a long way to go.

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