We are fine investing in India for the next 100 years: Amazon
â€œCustomers on Amazon, even if they chose COD while purchasing, they can change their mind at their doorstep, where they can say they want to pay through say their credit card,â€ says Amit Agarwal.
Sales at Amazon India have recovered from the demonetisation shock, and are again growing at 100 percent-plus, Vice President and India Head Amit Agarwal tells Moneycontrol.com in a free-wheeling chat.
He says that there has been a ‘dramatic’ shift in payment mix, with more customers preferring e-payment at the time of delivery, though they had opted for cash on delivery (COD).
“Customers on Amazon, even if they chose COD while purchasing, they can change their mind at their doorstep, where they can say they want to pay through say their credit card,” says Agarwal.
“The number of times, the customer switches his mind has gone up 10 times,” Agarwal says. However, he declined to give details.
“COD was a very meaningful part of our business. What we seen is even that piece has 10 times shifted to pre-paid,” he said.
Agarwal sounded unfazed about reports of rival Alibaba’s like entry into India in the near future. It is widely felt that Alibaba’s entry could trigger another round of aggressive price war in the e-tail space. That could spell bad news for incumbents at a time when discounts are narrowing and margins improving.
“We don't really think of competitors, our job is to keep serving the customers and the good part is that we are a very patient long term oriented company. We are fine investing for the next 100 years, if need be,” Agarwal said.
Amazon has invested close to USD 2 billion in the India business. Earlier this year, it said it will invest another USD 3 billion in this market.
But Agarwal admitted that it could be a while before India became as big a market as the US for Amazon, despite the spectacular rate of growth—150 percent year after year—it has been logging in India.
“Amazon globally has (earnings) USD 150-200 billion; India's entire retail market is USD 500 billion,” said Agarwal, highlighting the difference in scale between the two markets.
“Amazon US is a very big market built over many years. If we execute well in India there is no reason, why India should not be at least the largest after the US,” he says.
The selection on Amazon US is ten times that of Amazon India, it ships in 13 minutes, millions of Prime members have access to items shipped in an hour, Agarwal says.
“There is so much work to do. I think, we should be very humble about where we are right now,” he says.