Amazon now part of India's social fabric: Country Manager Manish Tiwary

'No change in intent to experiment with right framework or interest to invest in India', he says

Manish Tiwary, vice-president and country manager of consumer business at Amazon India, rarely misses his morning run, rain or shine. He runs at least 5 km in his Hoka Mach 5 shoes. Tiwary brings the same toughness to oversee daily operations at the e-commerce giant that has thousands of employees in India. Amazon just completed a decade in India but it is still early days, Tiwary said in an interview with Peerzada Abrar.

The company is planning several innovations to get the next 200 million customers. Here are edited excerpts from the interview in Bengaluru.

Amazon launched its first shopping website in India in June 2013. How do you view these 10 years in the country?

I've been part of Amazon’s journey in India over the last seven years. A lot has happened quite rapidly. We started on June 5, 2013, and only sold books at that point in time. We had just about 100 sellers in a small warehouse in Mumbai. The sellers would get their inventory in their personal vehicles to the warehouse because we didn't have transportation. The first book that we sold was ‘From XL to XS: A Fitness Guru's Guide to Changing Your Body’ by Payal Gidwani Tiwari. From that small warehouse, we now have close to 43 million cubic feet of space and 1.2 million sellers. We sell almost in every category and have a selection of over 120 million products, with deliveries to every pin code in the country. What we really feel good about is that we have a lot of support from worldwide leadership. The mandate was to design things which would work for the Indian consumer and also make them in the country.

During the early days, we created a (lighter) app, which would be impacted less even in regions which did not have good network coverage. We were the first country for Amazon to use ‘pay on delivery’ model. We introduced various languages early, from English to Hindi to South Indian languages. We launched Seller Flex programme, in which you can keep the inventory at your warehouse and use our technology and we will pick up the order and dispatch it reliably for your customer.  We built a mobile app for sellers because they would not use a desktop. It is now available in five languages besides English. Even for logistics very early on, we realised that in every neighbourhood there are kirana stores which would know everyone in that locality. We worked with them as delivery partners. Now millions of packets get delivered through that programme. We started using Indian Railways very early on.

Amazon founder Jeff Bezos has said that the 21st century is going to be India’s. What new opportunities are looking at in the country?

Look at Amazon Prime Video. The original TV series on it called ‘Farzi’ which stars Shahid Kapoor got streamed into 170 countries in 37 languages during the launch weekend. As we speak, they have 100-plus originals under various stages of production. Millions of customers find Amazon Pay, the most seamless way to pay. We had said we will digitize 10 million small businesses, create employment for 2 million people directly and indirectly, and do $20 billion in cumulative exports from India by 2025. We've already digitized close to 4.1 million small businesses, and have hit more than $5 billion in cumulative exports. In terms of incremental employment, we are at close to 1.1 million. There are very few other opportunities which are as attractive as India. For example, the e-commerce sector, because penetration levels are so low and the macroeconomic factors including GDP (gross domestic product) growth and a young population. I would say it's still Day Zero. We have lots to do, just on the core business. It promises to be a very exciting next decade. If you take the penetration of e-commerce it will probably be about 3 per cent in fashion and 1 per cent in grocery. Now dovetail it with the fact that we are the country with probably one of the youngest age profiles.

Our per capita is hovering at $2200-$2,300. There is a lot of data which shows that once you start crossing a certain point, the consumption would explode and that is what happened with countries like China. If you line up these factors together, that is what our focus going to be. There is so much headroom for growth that we could live off this particular combination of factors for the next few decades. Now, to do that, we have to do a lot of innovations (like live commerce) and reach the next 200 million customers. We need to innovate because what worked for the first 1.1 million sellers might not work for the next set of sellers. Our innovations would also be very focused on driving the flywheel which is getting more sellers and more selection and get our goods faster into the hands of the consumer. We have launched Amazon Air, a dedicated air cargo network.

Is there a slowdown in the e-commerce and retail sectors and what is your outlook for this year?

There are certain categories related to Covid where there is a slowdown there, like hand sanitisers. But I would also hasten to add that when we have a slowdown, especially in e-commerce where the penetration is very low, then we are not innovating well enough for the customers. Last year there was also the impact of Covid. Obviously, the growth in January last year can’t be compared to January this year, as the Covid tailwinds last year were very high. But the rest of the businesses are doing well. I continue to be very optimistic. There is a lot of innovation happening in the e-commerce space. Factors such as rising income, younger generation earning, and e-commerce online penetration being very low will continue to play this year as well. Last year was the first festive sale, post-Covid and it did go off really, really well. The way the per capita is growing, the consumption boost will also be very, very significant. So this year,  it should be a better Diwali than last year.

Amazon India has increased seller fees for some key categories. Do you see this spurring other e-commerce players to increase their fees and could this make products costlier?

Our seller fee philosophy is different. It's based on our cost of operations which we believe is the sweet spot for our sellers to do business. We have a cadence, where twice a year the fees get changed, sometimes it goes up and sometimes it goes down, it's not just one linear direction. There is nothing odd about this. Some other marketplaces may look at it to change their fees, but we would never do it at the expense of the seller business. That would not make good commercial sense. Of course, there is inflation in the market and that sometimes reflects in input costs and therefore the fees. But I wouldn't say that because of that sellers would have an offering which would be less attractive to the customer.

Amazon recently said it will put $12.7 billion into Amazon Web Services (AWS) in India by 2030. Do you see Amazon’s India focus shifting from e-commerce to cloud computing?

The first thing I take out of it is the confidence Amazon has in India. Whether it is cloud, (or) 100 originals being produced on Amazon Prime Video, or digitization of the stores, if you see all of these together, it shows that Amazon continues to be very bullish on India. Because all of it somewhere has to reflect on customer sentiment, whether you are a B2B or B2C business. Also, different businesses have different investment cycles. Building a data centre is a lot of investment and then it plays out over time. The stores have a different formats of investment. The big takeaway for me is Amazon continues to be super excited about what's happening in India.

You exited food delivery and edtech. What kind of impact do you see macroeconomic uncertainty having on Amazon India?

The economic uncertainty in my opinion impacts India lesser. We are still projecting a 6 per cent GDP growth. India continues to be the bright spot in the global market and the numbers are saying that. The layoffs are part of the people planning process and an annual procedure. You have examples of Prime Video and payments, we are very excited about what we see. This is a company of builders. We try and experiment in new areas, and sometimes they work and sometimes they don't. We had a couple of initiatives which we call ‘sandboxing’ within limited geography to know more. When we assessed some of those businesses in the second half of last year, we felt that it would be difficult to add value to the customer in a sustainable manner. So, we sunset them. At the same time in the middle of the last year, we started social commerce and in February this year, we launched Amazon Air. There is no change in our intent to experiment with the right framework or our interest to invest in India.

There are reports of Amazon deferring offer letters made to campus hires. Is there any impact on your hiring strategy in the country?
 

On the college front, we have deferred joining dates. To clarify, we've not revoked any offers and it's part of the people planning process. It should not distract us in any way from what we've achieved in the last 10 years and where we see our future going forward in the country. It's just a bump, which most organizations have. We have a programme called Amazon Future Engineers. It's right now present in close to 7,000 schools. We would have touched close to 1.7 million kids. In this country, in some parts, Alexa (Amazon’s AI voice assistant) responds to 17 million requests per day. When you think of these numbers, you suddenly start realizing how much part of the social fabric Amazon become.

A report by US-based researcher Bernstein says that Reliance is best placed to lead India's $150 billion e-commerce market in the long run, ahead of Amazon and Walmart (Flipkart), due to its extensive retail network, digital capabilities and Jio mobile services. Your comments.

They (Bernstein) would be in a better position to comment. I don't know how they came at it. I don't get worried. I think it's very important that we understand the stage of e-commerce in India. It is probably 2 per cent of the overall retail sector. I love the fact that people will come to try new things and we will get to learn from the. The report is a strategic paper which an analyst firm has written. If I meet you five years later, I would want to have the discussion be around how we have now reached out to 200 million customers. It is a concept and what are the innovations you need to build to reach them? I believe there are at least 16 million inventory points in this country.

You can call them shops, godowns or warehouses. If I managed to get all of them on the marketplace, just imagine the quality of service, the speed and the cost, which customers across the country would get. We have made some progress on that, but these are still early days. It is about getting the next set of customers and sellers. We have to make the right investments on the customer-facing front and technology. For example, today a lot of people use voice and visual search for shopping.