Power struggle? Amit Agarwal in control of Amazon India as Manish Tiwary bows out

Naturally, Agarwal was more of an insider than Tiwary as he spent around 15 extra years than the current India head.

In a sudden move on August 6, Amazon India said its country head Manish Tiwary has resigned to pursue an opportunity outside the company.

Amazon does not have plans to hire a replacement for Tiwary, a surprising move in a market where it competes with multiple old and new rivals – from Reliance to Tata and Flipkart to Meesho. At the same time, quick commerce companies such as Blinkit, Swiggy Instamart and Zepto are also eating into Amazon's share by expanding into categories such as electronics and fashion in the top 10 Indian cities, a cohort that accounts for a significant chunk of Amazon’s revenues.

Instead of finding a replacement, the US-based Amit Agarwal, senior vice-president (SVP) India and emerging markets, will oversee the operations in India, with Tiwary’s team reporting to Agarwal.

A spokesperson for Amazon did not issue a fresh statement. They maintained that "Amit Agarwal, SVP India and Emerging Markets, will remain closely involved with the Amazon.in team, guiding its strong bench of leaders to deliver on this opportunity."

Power struggle
In the last few months, the buzz in the industry of an alleged power struggle between Tiwary and Agarwal has grown louder.

Tiwary, who joined Amazon only in 2016, led the consumer business for the company in India including seller services and focused on changing the way India buys and sells online. Prior to joining Amazon India, he spent over 19 years at retailer Unilever and related companies.

Agarwal, on the other hand, was part of founder Jeff Bezos' famed S team (senior leadership team), who was tasked with building Amazon’s operations in India, during its early days.

Naturally, Agarwal, who joined back in 1999, was more of an insider than Tiwary as he spent 15 more years than the current India head who leaves in October to pursue another opportunity. 

“Tiwary was leading India minus the official title of CEO and key powers that an executive has,” a person briefed on the matter said, adding that Agarwal had a strong hold over the geography despite relocating to the US in 2022.

Instead of entrusting the Indian operations with one leader, Amazon recently created a dual leadership structure, where Tiwary and Agarwal led different teams in India. The restlessness in the leadership ranks translated to several exits from Amazon India in the past year or so.

Losing sheen

Over the past year or so, Amazon’s competitive intensity has reduced, according to a founder who is a top seller on both Amazon and Flipkart.

“Amazon’s hunger to do business is nothing like it used to be earlier. The company has become extremely bureaucratic and it no longer enjoys the edge it once had,” the founder said.

High attrition of category managers, P&L managers, logistics owners and other staffers from different divisions has only delayed processes. It now takes 5-6 days to resolve a simple issue that would earlier be addressed in just one day.

“Flipkart’s algorithm is backward but its people processes are top-notch when compared with Amazon. There is a contact person for every and any issue which makes life a lot easier for us sellers,” the founder added.

Even analysts said Amazon is losing its sheen in India.

“Over the past years, Amazon has not been aggressive and has lagged behind Walmart-owned Flipkart in multiple categories such as mobile phones, fashion and the like. Even as its arch rival (Flipkart) has been quick to tap into the growing potential of quick commerce, there has been no move on Amazon’s end which shows it has become complacent,” Satish Meena, advisor to Datum Intelligence, a market research firm focused on consumer technology, said.

While Amazon is still a key player in India’s metro cities, it has completely moved away from expanding into other regions. Even as Tier 2 and beyond cities are not a focus area for Amazon, smaller rivals like Meesho have grown their presence, captured a large chunk of the market and given the company a run for its money, Meena added.

Amazon India woes

For Amazon India the going has been tough for a while now.

It had several new businesses like education, food, B2B but had to shutter them after the verticals did not yield desired results. In all, even after investing $6.5 billion in India through 2014 and 2022, profitability has remained elusive for the e-commerce major. Amazon had negative EBITDA margins of 5-10 percent during the period, analysts at Bernstein said in a note in September 2022.

Even as months have passed, matters have not moved in Amazon’s favour.

In an AllianceBernstein report released in January, it was found that Walmart’s Flipkart was the dominant e-commerce player with a 48 percent market share in India. Flipkart's user base growth of 21 percent year-on-year (YoY) also outpaced industry competitors.

Meesho grew even faster, helped by a low base, at 32 percent. Amazon, however, lagged peers with a 13 percent growth in its user base, largely because of its relatively premium offerings compared to other players, the AllianceBernstein report added.

In FY23, the entity that runs the Amazon India marketplace, Amazon Seller Services, saw its revenue flatline at Rs 22,198 crore, a mere 3.4 percent growth YoY. That lacklustre growth even as its loss widened 33 percent YoY to Rs 4,854 crore in FY23.

That was likely why Amazon, while discussing the global unit’s quarterly results, has regularly skipped giving updates on its India operations, which led people to believe that India was not on the company’s priority list.

It, however, has other priorities in place.

Amazon, under CEO Andy Jassy’s leadership, has doubled down on its cloud services business – Amazon Web Services (AWS). CEO Jassy said the Seattle-based tech titan would invest an additional $15 billion in India by 2030, taking its total investment commitments in the country to $26 billion. A bulk of that – around $12.7 billion – would go towards growing AWS’ presence in the country.

The increased focus was likely because AWS is growing fast in India. AWS India’s revenue came in at Rs 12,781 crore (around $1.5 billion) during FY23, a 43 percent increase from Rs 8,956 crore (around $1.1 billion) registered in FY22, according to business intelligence platform Tofler.

That outpaced the growth rate of Amazon’s e-commerce business in India.

All said and done, it remains to be seen what Amazon India strategy will be as quick commerce gains ground, where it has been a laggard. India, after all, is one of the remaining growth markets, considering Amazon’s retreat from China, where it shut its official app store last year.