Amazon India is betting big on the Government's push towards a cashless economy. Amit Agarwal, the man who is leading the e-commerce giant’s operations in India, spoke to BusinessLine on the company's growth and innovations carried out post demonetisation.
With all this push towards digital and cashless economy, how do see e-commerce panning out in India?
E-commerce in India is in very early stage and so is Amazon. The focus is on investing in three major areas — How do we offer the largest selection of products to customers, how do we help SMEs and small businesses to offers products at great prices and how to make these products available faster. We are barely getting started. Over the last three years, we have made significant progress in making Amazon the largest e-commerce player in India, make it the most visited site and the most downloaded app.
In October, we talked about how 97 per cent of Indian pincodes placed their goods through Amazon. It is incredible and we are growing 100 per y-o-y at a time when the industry is flat or posting negative growth. And all of this has been due to the customer experience we provide. With the launch of Prime which guarantees next-day delivery and Prime Videos at no additional costs, this is great times for customers.
Post-demonetisation exercise, what kind of innovations have you carried out to mitigate the problem of cash for both your customers and sellers?
The primary reason for usage of cash is due to the lack of trust that a customer with a website. But with Amazon's focus towards customer experience, the share of cash was already very low and has dipped further with people switching to online payment modes. We obviously saw a drop in our sales for the first 48 hours when we switched off cash because we wanted to get our logistics network streamlined. Since then, we have recovered our growth to pre-demonetisation period and are growth at over 100 per cent year on year.
Would you elaborate on the innovations?
There are many modes a customer can choose to pay on Amazon. We allow customers to choose cash as a payment method and then allow them to pay by cards at the doorstep. We also have something called Amazon Pay which a customer can use to pay for products. Post-demonetisation, we have seen a tremendous growth in usage of Amazon Pay. We have witnessed a 10 times growth in digital payments.
How has 2016 been for you so far?
2016 has been probably the most exciting year for us. We have been voted as the most trusted shopping site, have posted triple digit growth every single quarter year on year, launches Prime and now Video. We could not have ended the year with more momentum. We expect to continue investing in adding more selection and cities to be eligible for next-day delivery.
What new features can we expect in 2017?
We really don’t talk about future plans but we have launched Amazon Now, our grocery segment, and Pantry (a subscription based model) this year. We want to continue with our innovations in line with the Make in India and Startup India initiative. We also launched Amazon Launchpad, which provides start-ups a great platform to sell their products not only in India but also globally in all those countries where Launchpad is available. Since our launch about hundreds of start-ups have signed up for the programme.
Where can we see the $5-billion investment going into? Any M&A opportunities?
We will invest in all the areas that I mentioned earlier from building logistics network to warehouses and customer experience. On acquisitions, we do not talk about it.
Can you please talk a little more about your Prime video?
What we have launched in India is Amazon Prime Videos. It is Bollywood and regional blockbusters. Every hot film will be available within days of its release and US TV shows will be available within hours. The full spectrum of series, including all the award winning Amazon originals, will be available. No matter what customers use they would want to use Amazon Prime video because this content is not available anywhere. We want to offer what customers want to see and hence we bring them to the customers. We are excited about our launch.
Will it always be bundled along with Prime?
We don’t talk about future strategy and currently only Prime members can access it at no additional cost.
What about IPL? Is that an area of interest to you? What about sports? It is lacking from this spectrum of your originals.
It is still very early and day one. The content that we are bringing right now is the most unique comparing the latest set of content out there. If you pay attention to all that is available, that this is not there. All of these is available for ₹499 is the best. I am hopeful that customers will find it good.
How has that impacted Prime customers. Can you give us some numbers?
Prime was launched just three months ago so it is little too early to talk on the numbers. We are overwhelmed with the Prime membership numbers.
Are the content targeted at top eight cities or tier-2 and -3 cities?
If you see our content, it has a huge spectrum that is relevant to wide customer base. For Prime, we have two-day delivery guarantee for 200 cities in India. Customers outside of those cities get free shipping. Top 100 cities get next day delivery. We are seeing tremendous Prime adoption across India. Similarly, Amazon Prime Video service, we have put lot of efforts to make it work for 2G, 3G customers so that they can control their data usage. We recognise that lot of customers have different speed and data plans. Customers can also use Wi-Fi to download content offline and watch offline.