Note ban has been good for Amazon, says India head
Amazon has been on a roll this year. In its third year in India, it has established its as a market leader. With 95 million products on offer and $5 billion in hand, Amit Agarwal, head of Amazon India, talks to HT about the year gone by and his plans for next year.
Can you sum up 2016 for Amazon in India?
This year, also our third in India, has been a defining one for us. Our first year here was about getting noticed, second about adoption, and third about becoming a market leader. Our investments started showing results this year.
Amazon believes in offering its customers a wide range of products at low prices, and fast deliveries. We now offer our customers 95 million products, adding 180,000 new ones a day. Ours is the largest selection in India. Soon, we will boast a range of 100 million products.
Considering you offer discounts, how much do you invest in building your business?
It is easy to lower prices. But it is not a sustainable business model. We are in it for the long haul. All our investments are made to improve customer experience. The only sustainable way to ensure low prices is to encourage sellers to reduce cost. We have been doing this for the last 36 months. More than 1,500 sellers in 2016 became part of the crorepati club (selling goods worth ₹1 crore). This is a growth of 120% over last year.
Has demonetisation affected your business?
We made fewer cash on deliveries as compared to others. So in the first two days, we stopped these to reprogramme the logistics. Since then, the number of customers switching to digital has gone up 10 times. Today, our business is back to normal. Taking into account the Diwali sale, our growth is 100% year on year. After the note ban, the cash payments (for Amazon) have reduced by at least 20%. Overall, note ban has been good for us.
What do you think about the tussle between Amazon and Flipkart?
I am only focused on improving customer experience. E-commerce in India is still in its infancy. Ten years from now, customer will want better selection, lower prices, and faster delivery.
But you have the upper hand. You have $5 billion to invest in India, and Flipkart doesn’t.
I think every entrepreneur, who cares about building a long-term business, should focus on improving customer experience. They should be willing to innovate. And that is how Amazon was built.
What do you expect in 2017?
Next year, e-commerce will be scaled up. People will be willing to pay for convenience. They will sign up for Prime membership, pay for fast delivery.