Taking learnings from India, replicating them globally: Amazon Prime head

Ghani says that the firm is making investments in infrastructure and last-mile capabilities to improve delivery speeds

India leads the way as one of the top geographies for Amazon Prime as the e-commerce giant continues to expand its selection and features, says JAMIL GHANI, head of Amazon Prime. In an interview with Peerzada Abrar, Ghani, who is based out of the company’s Seattle headquarters and was on an India visit, says that the firm is making investments in infrastructure and last-mile capabilities to improve delivery speeds. Edited excerpts:

What are the innovation-bets that you and your team are making globally and in India?

There is innovation unfolding right here in India, tailored for Indian consumers yet carrying global implications. In 2005, when Prime (the paid subscription service) was launched in the US, Amazon offered one million items, available in two days. That was mind-boggling for consumers and analysts who thought it would bankrupt the company. Fast-forward to today, we offer over a million items available for same-day delivery across India’s major cities. Over 4 million items are available the next day.

We continue to innovate on all the operations and technology necessary to deliver that much selection and speed for Indian consumers. We are also pushing the envelope on our content investments. What I love about the Indian market is its diversity. We are working with local creators to launch content that is popular not only here in India, but across West Asia and globally.

We’re also innovating into new categories.  For example, globally, we continue to invest in the grocery segment. Healthcare is another big investment area. We’re also innovating on how we make Prime accessible and available to more customers. We are testing out new versions of the Prime programme. There is Prime Shopping Edition. We believe it will introduce many Indian consumers who may be reluctant to commit to video and music and other things to shop and then over time, discover all the other things that Amazon has to offer.

Amazon CEO Andy Jassy said in the 2023 shareholder letter that the company sees meaningful progress in emerging geographies, including India, as it continues to expand selection and features and move toward profitability. Where does India fit in your overall strategy?

India leads the way as one of the top geographies in terms of our membership engagement and renewals. This is because of the value that our members see. India is a very large dynamic economy. There is a large population that is changing and evolving rapidly. We want to participate in that and be of help to the Indian consumer. But it also inspires us to invent for global consumers. This includes communicating the value members are getting from their membership.

Those customer experiences and features on the website have now been rolled out to West Asia. We are also taking them to Latin America. Because of the importance of the Indian economy, and being a wellspring of innovation globally, I spend a lot of my time focused here. In terms of financial contribution, India is a big area of investment for Amazon as well as for Prime. So, it will play a material component of the financial performance of the company for many years to come.

Amazon has said that over 7 billion Amazon items arrive the same day or the next day in 2023, and it expects even faster delivery times in 2024. What is your India strategy related to faster delivery, as well as regionalisation efforts?

No one would like things to arrive slowly or without precision. We have been investing for years in India. This includes large fulfillment centres, distribution, and delivery stations in cities and last-mile capabilities. That brings us to a place where we now have over a million items available the same day and over four million items available the next day in India.

We’ve got an ever-growing selection and we’re doing that, at a better cost to serve every day. Given the geographic distribution and different infrastructure in various states, it made sense to put products as close as possible to our customers. This means the product spends less time in transit. There’s often a misconception that delivering faster means associates work harder. That’s not the case. They are doing the same work. We’ve certainly streamlined the processes. Those same investments are happening in India as in every other part of the world where we offer Prime.

Industry people say that 15- to 20-minute delivery provided by quick-commerce layers like Blinkit, Zepto, and Instamart are taking a major portion of the sales of products away from players like Flipkart and Amazon. Do you think Amazon may come up with a quick-commerce service in India in the future?

I don’t have anything to say about our future plans. But we believe that customers need a wide range of selections available at faster speeds and delivered reliably. We are investing in that direction, and we will continue to do so. I think what’s going on in quick commerce is fantastic because it is great for customers and we ultimately want them to have a choice. We’re inspired by what others do in quick commerce and other spaces. But we’re going to keep on increasing the selections available at ever faster speeds.

Customers have different use cases. For example, I take my household. Sometimes I need things immediately. There are other times when later, today, tomorrow or the weekend is fine. We’re focused on the largest selection, at the most competitive prices, delivered with excellence and convenience. We are investing in faster speeds all over the world. In places like Japan, some orders are delivered at a fast speed and other items go slower. We have a range of speeds because they fit different needs against that large selection with the most competitive prices. In India, we operate as a marketplace.

What are the challenges that you are seeing due to macroeconomic conditions and is there any slowdown in consumer spending?

At the macro level globally, the economy this year and since the second half of 2023, is on firmer footing than we would have thought maybe a year or 18 months ago. But the reality is, the world has gone through a tough period economically and health-wise. There are still the consequences of inflation and there’s conflict in many places around the world. One thing that we see in terms of customer behaviour is a heightened desire for savings and value. At Prime, we are doubling down on adding more value to the programme through the various benefits that I talked about. We make every Prime Day bigger because members are saving billions of dollars globally through that event. The same thing applies to the Amazon Great Indian Festival and the early access that Prime members get. 

Amazon has also talked about expanding its drone delivery service which will allow customers to get packages in less than an hour. What potential do you see for such kind of technologies in India?

I can’t comment specifically on this opportunity in India. But I can certainly comment on how we do it globally. We believe that drone-based delivery will have a role in our range of delivery options. There are a variety of solutions that meet customer needs. The drones and the speeds that they deliver will have a role. But we are very early in that. We are having successful programs and there’s more to come in the months ahead.

Back in 2013, the common wisdom was that Amazon would bring its global playbook to India and then tweak it, but the marketplace had to be rebuilt differently. What are the learnings from Indian market?

The uniquely localised and customised expression of Prime in India has taught us a lot. This includes how you have to diversify and how members can access Prime and pay. India was the first country that worked with mobile operators to distribute Prime, bundled with their offerings.

We also had to innovate on recurring payments. We’ve learned with our partners in the payments landscape and the government to innovate and to make it easier for customers to pay in a trusted and secure way. We’ve taken those learnings to other places like Latin America, where we have similar complexities with payments. I don’t think there’s any other country (like India) where we have a greater diversity of languages, content and translations and customer experience, which allows members to enjoy content in their native tongue. We have applied that in markets like West Asia, Spain and Latin America. We take such lessons from India and apply them anywhere we can, just as we also take global lessons and bring those here as well.

India’s e-tailing sector is poised to experience a fivefold growth, surging from $59 billion in 2022 to an estimated $300 billion by 2030, fuelled by value-seeking ‘mass’ consumers. What are the new opportunities that you are looking at in the country?

We are ‘working backwards’ for the customers ’ needs. Wherever we think we can help and bring a proposition that will resonate with customers, we will attempt to do so. It’s our job to figure out how to do that sustainably, scalably and consistently deliver high quality. We start by delving into whether we can meet the needs and wants of our customers. There are many (opportunities) that we don’t address today. You can imagine where we might be experimenting in the future.