Amazon is spending billions adapting to a fiercely contested market of 1. 3 billion.
Having forfeited China to Alibaba and JD.com, Jeff Bezos is determined to win in India, a market of 1.3 billion people who at long last are discovering the pleasures of shopping.
Amazon.com Inc.’s chief has committed $5.5 billion to India and selected Amit Agarwal to spend it wisely. A trusted lieutenant who grew up in Mumbai and admires his boss and Bollywood star Amitabh Bachchan with near-equal fervor, Agarwal, 44, is furiously adapting Amazon to local conditions.
The company has set up a credit operation for Indians without bank accounts, built a streamlined mobile app so it doesn’t crash the cheaper phones typically used by small-town Indians and loaded up the online store with tens of thousands of eclectic products—from the butter chicken instant curry paste favored in Punjab in the north to the traditional churan herbal digestives used for centuries in central India.
So far it’s proving a tough slog. Almost five years after opening for business there, Amazon is spending billions fighting a ground war with local rivals like Bangalore-based Flipkart Online Services Pvt that know the terrain.
India is not so much one nation as a bunch of little Indias, whose people, culture and language are nowhere near as homogeneous as America’s. Selling stuff online in the big cities is comparatively easy; not so the hinterland where people tend to be less tech-savvy, smartphones are just catching on, and web connections are slower.
“In the West, buyers transitioned to online ordering after mail-order catalogs,” Agarwal says. “In India, we are building everything [from the] bottom up, and more than half our investments have gone into erecting delivery stations, warehouses and such.” Last year alone Amazon’s international losses ballooned to more than $3 billion, mostly because of heavy spending on logistics, digital payments infrastructure and warehousing in India.
Agarwal—who moved back to the country in 2013 after almost 15 years at Amazon, mostly at the Seattle headquarters—spent the first couple of years proving that e-commerce is no longer just the prerogative of urban, English-speaking Indians. The company now has 150 million registered users who can shop for 160 million items offered by 300,000 sellers. “The rate of change is extraordinary,” Agarwal says....MUCH MORE