Earlier this month, ecommerce behemoth Amazon launched its India marketplace at Amazon.in, offering Books and Movies. Since then, they’ve launched the Kindle, and today, they went live with electronic gadgets. In a market which doesn’t allow foreign investment in b2c multi-brand retail online, amazon has another offering – a price and seller discovery platform called Junglee.com. We spoke with Amit Agarwal, Vice President and Country Manager, Amazon India about the company’s approach to the Indian market, their selection of sellers, why Junglee.com exists and well continue, taxation challenges and of course, the India’s FDI policy for e-commerce. Note that this interview was conducted before Amazon’s launch of Kindle and electronic gadets in India.
MediaNama: What took you so long to launch? You’ve been around for two years, but have launched Amazon.in only now.
Amit Agarwal: We actually started with Junglee 15 months ago. For Amazon.in, our vision for Amazon in India is the same as the global vision. We want to be the most customer-centric company and build a place where customers can find, discover and buy virtually anything online. The approach that we have in mind in India is how do we do the heavy lifting for sellers of all sizes across India, so that they can offer customers the Earth’s biggest selection of products.
For us to put together the infrastructure, the team, to make sure that we are ready to deliver the customer experience. Even in the most mature geographies, and the most mature categories, books, we still believe it is Day One and we are still adding selection and expanding categories, lower prices, and making the delivery fast and reliable. India is so nascent that I would say that we are early.
MediaNama: How do you go about selecting sellers?
Amit Agarwal: Our overarching vision for sellers is that we want to be a meaningful sales channel for every seller, no matter what their size and shape. If you look at Amazon marketplaces globally, we have self service registration where we invite anyone, from individual to the largest retailers to come and sell on the platform. We have the same vision for India. As we get started, in order to make sure that the starting point offers the right critical mass of selection, we are asking sellers to contact us. We do look at the three dimensions that matter to us – vast selection, low prices, and fast and reliable delivery. We look at these three pillars and ask ourselves is this the right seller to come and seed our category. But over time, you will see us, very quickly, open it up for anyone.
MediaNama: How do you ensure reliability if it is not being fulfilled by Amazon?
Amit Agarwal: You don’t design a platform or software for the 1% of people who are going to be bad. You design it and optimize it for the 99% that are going to be good.
MediaNama: 7 years ago, e-commerce in India wasn’t taking off because there was very poor reliability. You’d order something and be delivered something else…
Amit Agarwal: In most of these cases, the seller would self-select. We have experience serving over 2 million active sellers globally, and by active, I mean over the last 12 months, we have developed sophisticated algorithms, processes and tools to monitor seller performance real-time and hold them accountable. That’s something we bring on Day 1 to India as well. Customers should be confident that Amazon’s 100% guarantee protects them, no matter how we are doing. The onus is on us to hold poor sellers accountable.
MediaNama: Any reason for charging a convenience fee for Cash on Deliverys?
Amit Agarwal: We are not charging it. What we’re saying is that it’s free at this point of time, but we are indicating to customers that that’s what the charge would be at some point in the future.
MediaNama: What’s the thought process behind this? There are competitors giving it for free.
Amit Agarwal: At present I’ll leave it at that. We will listen to our customers and decide what makes sense. At present, customers have parity.
MediaNama: One reader question that came in was – any plans to extend the Amazon Prime service to India?
Amit Agarwal: Our objective is to provide fast and reliable shipping. That aspect of Prime is definitely a priority. As far as the specific service goes, I do not have a timeline of, and I do not have any set plan of whether or not we would launch it in India.
MediaNama: Why haven’t ebooks been launched and what about self publishing options?
Amit Agarwal: There is an ebooks store hosted on Amazon.com, and I would encourage you to shop, and choose the country as India.
MediaNama: Why isn’t it directly accessible from Amazon.in?
Amit Agarwal: You’ll have to stay tuned for that.
MediaNama: Why does Junglee still exist?
Amit Agarwal: Because it has a very important vision to fulfill. The vision that we started it with was to organize all selection in India, online or offline, inside of India or outside. The objective was to help customers find where to buy anything, anywhere. Think of it as a map of products and sellers. Clearly we have a long long way to go, but it has done a fabulous job aggregating selections from most if not all online sellers there. We have more than 900 websites integrated, more than 20 million products across 23 categories, across organic teas to fresh flowers to home furnishing, to jewelry, and sellers are using it to advertise their selection. We’re told that many sellers have seen more than a 4X increase in traffic, and 40% higher conversion than the other channels that they rely on for selection. All in all, Junglee has a very important place.
The way I look at Amazon.in is that it’s job is to become one of the most trusted destinations or places on that map. Amazon.in has its work cut out to earn customer trust as a place they can buy, while Junglee.com has its work cut out to earn customer trust as a place where a customer can find where to buy. Both these visions are very complimentary, if I look at the overall Amazon vision to help find and discover and buy anything online. Both are very important services for us, and we are going to aggressively invest in both of them.
MediaNama: What were your key learnings from Junglee in terms of consumer behavior?
Amit Agarwal: I would say that the key learnings were related to how important it is to focus on selection and quality of selection, and how important it is to focus on eliminating defects. because each time we would add more selection, or offer more information transparency – shipping speeds, payment methods, prices, as we ensure that we keep the defect rate and the inconsistency of information between Junglee and external websites, which again is a hard problem because it doesn’t own any of those feeds. All these things matter. Customers are good at pointing out incidents, and those incidents form and image of the service. For us, eliminating such defects and adding more selection, providing more information transparency are very good learnings in terms of customer behavior.
MediaNama: What takes precedence for most consumers? Price or time of delivery?
Amit Agarwal: We haven’t come across a customer yet, or a geography yet, that says I want smaller selection at higher prices and slow and less reliable delivery. So all of these things matter.
MediaNama: What are some the challenges that you see in the Indian market? It’s not an easy market to be in.
Amit Agarwal: The execution brings challenges. There, I would say that Amazon has proven over time that that drives invention. Junglee is a great example. We do not have such an offering anywhere in the world, but we had the courage to take the risk to start with an offering that we don’t have anywhere else. We thought that there was a need that the consumer had, and a need that the sellers had, because the cost of driving traffic was very high, and providing a level playing field to sellers of all sizes, and selling on Amazon and Fulfilment by Amazon do the same thing.
MediaNama: What kind of execution challenges?
Amit Agarwal: These are things that you experience. For example, Fulfilment by Amazon in India would have more difficult taxation laws to take care of. The beauty is that our offering, as you read on the site, would allow a seller to be completely egregious about the complexity of moving products across states, taxation, CST, VAT, Octroi, because we have managed to hide that complexity for them. But to get to that simplistic view of the service was a hard problem in India, and to provide that at scale and fast and reliably is hard. We introduced pin code level delivery estimates on our site, which we don’t do elsewhere in the world, because things take different times to deliver. All these challenges bring forth innovation. Most of the selection in India is not organized. Junglee has the ambitious role of organizing it, but the lack of online catalogs, of unique identifiers, makes it even more important for us to use technology to do that at very high scale. This is because India is a very nascent market as far as organized retail and online retail go, but it offers us an opportunity to use invention to solve those problems.
MediaNama: From a taxation perspective, it’s usually incorporated into the price of the goods. Is that what you’re doing?
Amit Agarwal: That is correct.
MediaNama: What about challenges on the regulatory front? You’ve been having conversations with the ministry about FDI. How do you think that is going to go?
Amit Agarwal: I don’t control those and I have no idea what the government would do, so I would leave it to them. from our side, if you look at our global offering, we provide a fair and level playing field to sellers of all sizes. The second thing we do is, we participate in that marketplace ourselves. In case of India, we’re doing the first part, not the second part, because that is the part that is precluded. We would welcome changes that make it more convenient to serve customers. A policy that allows Amazon to be a seller would allow us to offer more selection that our sellers are not able to offer. And smoother taxation laws would make it easier for sellers to move their goods around, but at the same time,our job is to hide that complexity from our customers.
MediaNama: What about availability of inventory from the US being made available in India?
Amit Agarwal: If there exists a seller in India that sources from International distributors, then that seller can sign up and sell on Amazon. We ourselves do not influence that, because we ourselves are not a seller on the platform.
MediaNama: What are your plans for marketing in India?
Amit Agarwal: Our plan for marketing in India is that we make a great service. Pretty much, globally, we take it as an article of faith that if we optimize the same thing – vast selection, low pricing, fast and reliable delivery, customers, over time, will choose us, and we have a lot of patience, and a very, very long term outlook. For us, we ask ourselves how do we spend every week, month, day, optimizing those three things. Of course, we have to educate customers of what we are doing. Right now, our focus is to do measurable online channels to do so. We have experimented with some of the other more traditional channels elsewhere in the world, and we would do that in India at the right time, as well. Currently our focus is on building the right service.
MediaNama: On build vs buy, you are building right now. But would you acquire something in India?
Amit Agarwal: We have a long standing tradition of not talking about what we may or may not do. I would only say that we are very excited about getting started. We do not speculate about what me or may not do.