Amazon rolls up sleeves after Walmart-Flipkart, eyes next 100 mn customers

After being pipped by rival Walmart in the race to acquire a majority stake in India’s largest e-commerce marketplace Flipkart, Seattle-based online retail giant Amazon says it will stay its course in organically growing its business in the country, a model which has worked wonders for it so far.

Celebrating its fifth anniversary of doing business in the country on June 5, Amazon has set itself a lofty goal of bringing the next 100 million customers on to its platform in the next five years. While it will continue to focus on its core competencies of enhanced selection, delivering value and convenience, the next big focus would be working towards making its services more accessible, Amit Agarwal, Senior Vice President and Country Manager at Amazon India told Business Standard.

“I think the next five years would get underlined in our ability to bring the next 100 million Indians to discover and aspire with Amazon. It would be a time where ‘Prime’ becomes the most loved programme in improving the daily lives of our customers and where the Indian small and medium businesses will use Amazon to become national and global brands,” Agarwal said.

Amazon says that while the next 100 million customers will demand the same quality of service and convenience that it offers today, they will also require far better ways to use its service. While some of the technologies such as Alexa that allows customers to order products on Amazon just by voice command have already been rolled out, more such features need to be built going forward.

This will include better regional language support, better ease of paying for products and services using cash, services such as Alexa will get smarter and even easier access to credit to make more expensive purchases, he added. Agarwal says the resultant view of what Amazon wants to become in the next five years is in-line with the vision that the people of the country have about “New India”.

“If you don’t really have a financial institution that can give you credit, then we will give you credit, because we know you so much more because you come to us everyday,” added Agarwal, without divulging further details on when Amazon could bring its own credit offering to customers and merchants in India.

While the competition has become far stronger, Amazon maintains that it is committed to winning in India over the long term, a vision which spans over multiple decades for it. It says, it will continue to invest any amount of money that is required to do so and will not be restricting itself by placeholder figures such as the $5.5 billion CEO Jeff Bezos has committed to investing here.

For Bezos, India marks the most important market, probably second only to Amazon’s home market of the United States. It’s also why he has given Agarwal, a key aide, such a free hand to run and customise the business to suit the needs of Indian customers. A big example of such frugality is the company’s Prime subscription service which was launched in India last year and has seen its fastest growth in the country compared to any other country where it was launched.

For Amazon, Prime will be a big weapon in winning in India. While the service already has 40 million products available for free delivery within two days and it would look at vastly expanding the scope of the service in the next five years, said Agarwal. Prime in India will begin to resemble what the service looks like in other geographies with a far larger portion of the overall inventory being Prime-enabled and far more locally relevant content being available for streaming.

Agarwal said, India is the only country where Prime members enjoy services such as one-day delivery and free access to Prime Music. The company would sink a large portion of its future investments into the country, using local content and music as hooks to lock customers onto its platform.

While a lot of what Amazon plans for the country, the company will do on its own, it is also looking at synergies with other local businesses through investments. The company has so far made four investments in India - a gift card company Quicksilver, home services firm HouseJoy, offline retailer Shoppers Stop and most recently in insurance firm Acko.

“Our organic structure of obsessing over customers and thinking long term is working and we will continue to invest in this approach, but when we see visionary entrepreneurs who are motivated by the same mission (to serve customers) we could work together and will partner with them,” said Agarwal.

Apart from building relevant technologies to serve the next 100 million customers and expanding Prime to retain as many of them as possible, Amazon will also continue to invest in infrastructure. So far, the company has invested half of money it has committed to India in infrastructure, be it warehouses, supply chain, or for skilling entrepreneurs to sell on its platform.

Agarwal said that with India not being a homogenous country, it’s imperative that Amazon continued to invest in building new warehouses as it moved deeper to serve more customers in the hinterland. He added that it was why infrastructure would continue to be a key investment area for Amazon in the next five years as well.

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