Amit Agarwal seldom shows his emotions. But the Amazon India head is visibly happy these days. The e-commerce platform recorded its highest number of transacting customers and purchases this festive season. And, according to the research agency Nielsen, it also had the highest share of transacting customers and purchases across all online shopping platforms during this period.
Agarwal has been steering Amazon in India since it started operations here. An Amazon veteran, he joined the company in 1999 and led several global initiatives in the formative stages of Amazon’s seller and web services and external payments businesses. He played a crucial role in Amazon’s international expansion, including launching its retail presence in Italy and Spain. Agarwal, who has a master's degree in computer science from Stanford University and a bachelor's degree from the Indian Institute of Technology, Kanpur, was also the global technical adviser to Amazon founder Jeff Bezos. In an exclusive interview, he talks to THE WEEK about how the e-commerce landscape in India is fast changing and the company's plans to deal with it. Excerpts:
E-commerce still accounts for only a small percentage of retail in India. How is Amazon tapping into this market?
India is at an inflexion point. In the next five years, it will grow to become a $5-trillion economy and a $1-trillion digital economy, driven by the world’s largest and youngest mobile internet base. Millions of small and medium businesses will embrace technology and become digital entrepreneurs. Our approach in India has centred on empowering the large base of small and medium businesses to serve customers. Amazon is India’s most transacted marketplace with more than 100 million customers. We will continue to use technology to enable millions of small and medium businesses. We are focused on making it easier for the next 100 million customers to shop with us, making it more affordable for them to consume more, and shop in their preferred language, even using voice.
What really is making Indians shop online?
We believe that customers globally are similar—they love selection, value and convenience, especially fast and reliable delivery. Our obsession with serving customers across these dimensions has allowed us to shape customer expectation of e-commerce beyond just value and earn their trust to become a part of their daily habit and a destination of choice to find, discover and buy anything online.
Amazon recently opened its largest campus in Hyderabad.
Amazon started operations in India in 2004 from Hyderabad. Over these years, we have invested significantly across 30 office spaces, the Amazon Web Services APAC Region in Mumbai, 50 fulfilment centres in 13 states as well as hundreds of delivery stations and sort centres, creating nearly two lakh jobs in India. The Hyderabad campus is our first owned campus outside the US and is the largest globally. It is a tangible commitment to our long-term thinking and plans for India and a continued reaffirmation of how India is a key talent hub as well for Amazon. We now have many global teams based in India, managing some of the most complex technology roles—financial operations, global selling technology, Prime Video global technology and so on.
In good company: Agarwal with Amazon founder Jeff Bezos when he visited India in 2014 | Bhanu Prakash Chandra
Why is the fashion segment so important for Amazon?
Fashion is one of our fastest growing categories, with most new customers first shopping for fashion on Amazon. We are using technology and machine learning to make it convenient for customers to discover and find what they might be looking for. We have partnerships with large offline brands such as Shoppers Stop and Max.
Is Amazon trying to bring in kirana stores to its fold in India. What opportunity do you see in the grocery business?
We recently launched Amazon Fresh in four cities on Amazon.in. This is in addition to Amazon Pantry. As we expand our services, we are increasingly partnering with the local stores, including the kiranas. We want to include them as part of our ecosystem and help them scale with us. Tens of thousands of local stores across 350 cities have expanded their daily operations to become digital entrepreneurs, acting as pickup and delivery points or offering assisted shopping to our customers.
Amazon aims to surpass $5 billion in exports over the next five years. How do you plan to achieve this?
Global selling was launched with a few hundred sellers in May 2015 and currently we have more than 50,000 sellers selling 150 million ‘Make in India’ products across 12 international marketplaces. More than 80 per cent of these sellers are from non-metro cities. The programme has witnessed a staggering growth, exceeding cumulative gross merchandise sales of $1 billion. We expect this to reach $5 billion by 2023. We have been seeing the category mix and product mix evolving each year. The increasing customer demand for traditional product categories such as home linen, leather, tea and sport accessories that India has always been known for is now supplemented by the growing popularity of Ayurveda products, STEM toys, beauty products, gems and jewellery as well as commodities such as coffee, ghee, natural herbs and spices. The aim of the programme is to encourage more exporters to come online, reach out to a global customer base and scale their businesses and build global brands.
How different is the Indian e-commerce market from others that Amazon is present in?
Though the relatively unorganised retail infrastructure, underdeveloped logistics, emerging payments infrastructure and other challenges pose headwinds in India, they also offer an opportunity to invent on behalf of customers. India is in a unique position to overcome these headwinds with its several catalysts, such as a young and consuming middle class and one of the largest bases of mobile internet users, a massive base of small and medium businesses, and a large entrepreneurial talent pool. We were surprised by how quickly customers had responded, how small and medium businesses were embracing technology, and the increasing rate of innovation in the country. With online retail penetration at low single digit levels, the long-term online opportunity is massive. We are committed to this long-term opportunity.
While not at work, what keeps you busy?
I like listening to music, strumming my guitar and binge-watching Prime Video originals. I do take time off to go on holidays with my family. I love mountains and long-distance treks. Australia is my favourite holiday spot. I de-stress by going on early-morning jogs with my music on. I also take on tinkering projects with my kids to de-stress myself.