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Amazon has been operating in India for ten years, despite certain setbacks.

Amazon is optimistic and committed to the Indian market despite the “ups and downs” it has faced, a top company executive told Retale, as the online retailer completes a decade in the country.

“While there will be some ups and downs… I would say we are as excited, if not more, with the prospect of what we can achieve in India,” Manish Tiwary, vice president and country manager, Amazon India consumer business, said in an interview.

Amazon’s 10th anniversary in India coincides with the ecommerce behemoth cutting costs, laying off thousands of employees, shuttering non-performing experiments and resetting its overall business globally after two years of unprecedented growth in online shopping that was fuelled by Covid-led lockdowns.

Under chief executive Andy Jassy, who took over from Amazon founder Jeff Bezos in 2021, focus has sharpened on profitability as he looks to rein in costs. This is starkly different from the Bezos mantra of growth over profitability for over 25 years as a publicly listed firm.

Recently, Adam Selipsky, chief executive officer of Amazon Web Services (AWS), told Retale that the Seattle-headquartered company will invest about $12.7 billion to expand its business in India till 2030. Selipsky was appointed AWS chief after Jassy’s elevation.

Tiwary, a Hindustan Unilever veteran who joined Amazon in 2016, said the AWS investment is a reflection of Amazon’s commitment to India and not indicative of focus shifting away from commerce.

“Ultimately, a business-to-business (B2B) vertical also has to depend on business-to-consumer (B2C)… and, therefore, the bullishness in terms of investment in India continues to be there,” he said. “It’s across, think of Prime Video– they have close to 100 originals still under production. Nothing much has changed between January and May. Some of these global dark clouds were there… But we launched Prime Air (recently), and that’s a pretty big commitment.” Prime Air is Amazon’s airline cargo unit, which reduces shipping time significantly. It was launched in India in January this year.

Amazon India has trimmed its workforce across a few rounds of layoffs, as reported by Retale in November last year and earlier this month.

Commerce biz critical to India

The commerce business is as important, Tiwary told Retale, where Amazon has ploughed in $6.5 billion to build infrastructure like supply chain, logistics and warehousing, all of which were non-existent when it started operations in India.

“I still remember my first meeting with Amit (Agarwal who started Amazon’s India unit). We always said we have to change the way India buys and sells in a sustainable manner… And if we want to make a difference, we have to work with the ecosystem partners,” Tiwary said.

In 2021, Amazon decided to push exports to $20 billion, he said. “Along with that, we said we will employ 2 million people indirectly; we are already at 1.1 million. In the past ten years, we have already become a part and parcel of people’s lives. A lot of the innovation, which has happened today in ecommerce, and when we see other marketplaces, D2C brands, sellers becoming large, Thrasio kind of models coming up in India, we feel good about it because we’ve played our own small role in building this ecosystem in India,” Tiwary said, discussing the evolution of commerce in India.

Amazon after Amit Agarwal

Agarwal set up the company’s India commerce business at a time when the market had players like Flipkart (sold to Walmart in 2018) and Snapdeal. Since its India entry, Amazon’s biggest competitor has been Flipkart, a scrappy startup founded by IIT-graduates Sachin Bansal and Binny Bansal (not related) who worked at Amazon development centre’s Bengaluru outpost.

Last year, Agarwal’s role was expanded to lead the international consumer emerging markets team and businesses, in addition to his India role. Agarwal would lead its presence in emerging markets in addition to his current role, as senior vice president India and emerging markets. Over the past few years, as Agarwal started spending most of his time in the US, Tiwary started spearheading the day-to-day operations.

The company has been exiting its early-stage experiments like food delivery, edtech and other verticals, even as reports by various third-party research firms say the etailer has lost market share as the domestic ecommerce industry has slowed down.

But Tiwary refuted the data, saying the internal markers do not represent this trend. Retale had reported on May 11 that shopping across ecommerce platforms is growing slower than anticipated, citing industry executives, multiple brands and third-party platforms tracking shipment and sales data, with Amazon feeling the tightening.

“We have internal markers just like any other business… Every business has its path to profitability. But all of us, including Amit (Agarwal), myself and worldwide stakeholders feel good about the journey we are on,” Tiwary said. He refused to put a timeline to when the India business will turn in profits, a point of concern which has affected its rival, Flipkart, too.

Tiwary reiterated that India continues to be one of the tech major’s most promising investments for various reasons, including its large population and its GDP (gross domestic product) growth.

Going forward, Amazon will continue to invest in its logistics infrastructure and experiments to tap into the next 200 million users through its social commerce platform Glowroad, which it acquired last year, its business-to-business ecommerce marketplace Amazon Business, and pharmacy vertical Amazon Pharmacy.

“The portfolio approach always continues, but 80% of what we do, we always remain focused on the core business of fashion, Amazon Fresh (grocery delivery) and electronics, that is what consumes a large part of our time, interest and investment,” said Tiwary.

Regulatory challenges

Last year, brokerage firm Bernstein said Amazon’s India report card has been “decidedly mixed”, with regulatory challenges being highlighted as a major headwind for Amazon. Retale had reported that Appario Retail–one of Amazon’s largest sellers where it holds a stake– is transferring inventory to other merchants as it looks to cease operations as a seller. Another top seller, Cloudtail, a joint venture between Infosys founder NR Narayana Murthy’s investment office Catamaran Ventures and Amazon, also had to be shut down, prompted by regulatory changes that prohibit a foreign entity running a marketplace as well as group companies from equity participation in any of its sellers or having control over their inventory. This is not the case with domestic players like Reliance Retail and Tata Digital, both of which have been aggressively investing in their ecommerce business.

Tiwary said he has not seen local regulations hurt Amazon. He said the government’s recent foreign trade policy (FTP) actively promotes exports through ecommerce. “Two months back, the foreign trade policy, which Piyush Goyal put out, is actually very, very supportive of exports using ecommerce and which is something we do,” he said.

Amazon is aiming to export merchandise worth $20 billion from India in the next few years. It had earlier set a target of $10 billion.



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