Last Sunday, when I met Jeff Bezos, founder and CEO of Amazon.com, I was given to understand that he was on a four-day visit to India, and he himself joked about how he could not meet Prime Minister Narendra Modi because he had swapped places with the leader who was away in the US.
As it turns out, he stayed back for three more days and met Modi on Friday. That symbolises India’s importance for Bezos.
In fact, I thought Amazon as the world’s top online retailer, but it is not. Last year, Amazon’s e-commerce sales were around $69.7 billion of its nearly $75 billion in revenues while Alibaba’s online merchant sales were about $240 billion in 2013.
The Chinese giant’s market valuation was at $221 billion after it went public in the US last month, far in excess of Amazon’s market capitalisation of $142 billion, although Bezos, at $30 billion, has a personal wealth higher than Ma’s $20 biilion.
Alibaba’s power is from the way it lords over e-commerce in the world’s most populous country. With restrictions on foreign direct investment in both multi-brand retail and e-commerce, India is out of bounds for direct action, but Amazon functions as an online marketplace for merchants, and, as Bezos says, it is willing to work within local regulations.
Its recent skirmishes with sales tax authorities in Karnataka showed that pushing the envelope is not easy.
More liberal laws could give Bezos access to the world’s second most populous market, and give Amazon a chance to match Alibaba.