The festive season has a different kind of exuberance among ecommerce companies. As the nail-biting, needle-moving and discounts-raining battle between Amazon and Flipkart takes off, Amit Agarwal, Global Senior Vice- President and Country Head, Amazon India, has told Moneycontrol that he “won’t be surprised” if the American etailing giant emerges as the largest ecommerce marketplace in India.
But, competition is not on his mind if Agarwal is to be believed. “It might sound boring,” Agarwal said. “I really don’t focus on competitors, and, six years now, you should know that I really mean it.”
But, that does not mean Amazon wants to give Flipkart the slightest room to corner more online shoppers in the sale, which is expected to generate $4.8 billion of business for the two companies. “We want to be the place where most Indians start their shopping journey, we want to be the place where Indians love us enough to become Prime members. I also want Amazon to be the marketplace where most sellers find growth,” Agarwal said.
The metric that Agarwal uses to measure success is different. There is a specific number of new customers that Agarwal wants to acquire, a specific number of the existing number of customers that he wants to convert into Prime members, and where sellers find the highest growth.
“I can assure you that when we look at those metric we will be the most looked in, most shopped, most transacted and most loved marketplace out there,” Agarwal said, when asked about its competition with Flipkart. He is happy to be compared on the metrics that matter and have meaning and not on gross merchandise value (GMV), which is the total value of sales without considering discounts and promotions.
However, Agarwal does not see Diwali and the festive season sale as a winning or losing moment. “We have a very unique marketplace out there where our customers will not have to trade-off value for convenience,” he said, explaining that he does not want customers to come out of Diwali and say that they got more value, but at the expense of service.
“We believe in earning the customer’s trust so that they come back after the season goes,” Agarwal said.
On the other hand, Flipkart wants to play on value. Its CEO Kalyan Krishnamurthy said a week ago that the company pivoted over value versus service, which was a difficult proposition.
As Agarwal wants more people to come and shop on Amazon and buy its Prime loyalty programme, which offers faster deliver and ad free music and videos, the ecommerce company will have to be relevant for Bharat. To give a sense of diversity of product demand on Amazon, he said, “Among our top-selling product is salt, and Echo Dot, and Prime memberships and more cell phones. People are shopping a wide variety of products. We have launched Fresh in four cities. People are buying onions, potatoes and spinach, which never happened before.”
He also added that 91 per cent of Amazon’s new customers came from smaller towns, and 66 per cent of Prime members were shopping from smaller towns – a result of large selection, low prices and faster delivery.
He wants to do that by removing bottlenecks using technology so that sellers can pass on the benefits to customers. Agarwal’s comment comes at a time when the government is cracking down on artificially-high discounts, which retailer lobbies says is cannibalising businesses of small merchants.
“I have talked about this before -- how removing defects can save cost, and allows our partners to make more money on every sale. We don’t maximise margins, but we maximise absolute profit, which allows them to invest the profits back into lowering prices, and that is the only sustainable way to help sellers growing and provide our customers great value,” said Agarwal.
He adds that sellers who have embraced technology are not seeing slowdown, and are in fact seeing growth.
“Those who are not using technology are the most vocal, disgruntled base out there. And my only advice is to embrace technology,” said Agarwal.
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