Legend has it that Amazon founder Jeff Bezos wanted to initially call his firm Relentless.com. In India on his second visit, Bezos has decided to do exactly that — get relentless.
By Sayan Chakraborty, Darlington Jose Hector
The India arm of the $75-billion global e-commerce behemoth Amazon will look to explore the tremendous business opportunity in India’s 35 million small and medium enterprises and devise India-specific innovations.
Amazon, which forayed into the $3.1-billion Indian e-commerce market in June last year, is locked in a game of oneupmanship with homegrown e-tailer Flipkart, having announced an investment of $2 billion in the country.
The cash pile, according to Bezos, will be spent on building performance centres, upgrading logistics services, developing the mobile platform and new tools and techniques to help the small and medium businesses. “There are unique opportunities in India. One of the things that is very unusual about India is the number of small and medium size businesses that you have.
We want to make it easy for small and medium businesses to reach out to customers in this digital economy,” Bezos told FE in an interaction on Sunday.
Bezos asserted that certain India-specific inventions, like the Easy Ship services, wherein Amazon picks up the products from a seller and delivers them to the desired pin code, can be adopted into its global strategy. Innovation will continue to remain a key part of the company’s strategy, which has straddled across electronics categories globally, from e-book readers and tablets to phones and drones.
“Invention requires experimentation and experimentation implies failure. If you know it’s going to work, then it’s not an experiment,” said Bezos, whose wealth is estimated at nearly $30 billion.
Amazon’s interest in the small and medium enterprises has been echoed by several homegrown e-tailers. While Snapdeal recently announced that it was inching close to the 100,000-seller mark, Flipkart has been tying up with industry bodies like FISME and NCDPD to penetrate the SME clusters.
Bezos, however, dismissed notions that a significant part of the promised $2-billion investment will go into acquisitions.
“Most of our growth will be organic. To be practical, acquisitions may be necessary. But, our basic strategy will the same as has been all over the world, which is to grow organically,” Bezos said.
A little more than one year in India, Amazon ran into regulatory authorities over VAT issues. The company’s fulfilment by Amazon services, wherein it encourages merchants to stock goods in its warehouses even before an ordered is placed, came under scanner. Bezos, however, was unperturbed by such hiccups, which he said was a norm everywhere.
“The details of the situation are always different. Every country has unique rules and regulations and our job is to follow them all. In that regard, India is very normal. People keep saying it is hard to do business in India, but that is not our experience,” Bezos said.
In an irony of sorts, Amazon’s nearest business rival in India, Flipkart, was floated by two former Amazon employees as an online book store. Until Amazon’s burgeoning presence started pinching the domestic e-commerce companies, Flipkart co-founders Sachin and Binny Bansal had referred to Amazon as an inspiration. But, as the turf war intensified, the idolatry waned, with China’s Alibaba becoming the new talking point.
Amazon was expected to capture the fledgling Indian e-commerce market with effortless ease, with domestic players falling by the wayside. Despite its deep expertise in technology and online business models, the global major, instead of having a bull run, is fighting a pitched battle with the domestic e-commerce juggernaut led by Flipkart and the Snapdeal.
Even, Amazon’s deep pockets do not seem to be much of a concern. Since June 2013, when Amazon opened shop in India, Flipkart has raised around $1.4 billion from investors while Snapdeal has cornered close to $235 million in 2014.
The duo has also been competing to launch products exclusively on their platforms, especially in the electronics segment. While Flipkart set the ball rolling by launching mobile phones from Motorola and Xiaomi with resounding success, Amazon recently announced exclusive launch of Microsoft’s Xbox One gaming consoles in India.
“We stick to our approach, stay heads down and don’t pay much attention to our competitors. It’s a customer-centric strategy. There is room for lots of winners. It’s true everywhere we do business. In the US, we are about 20% of e-commerce. These are big markets. It’s early even in the US, in India, everywhere,” Bezos added.
