India emerging Amazon’s biggest overseas investment market
30 Apr 2016
India is Amazon's second biggest investment market, after the US, and the company expects it to overtake Japan, Germany and the UK to become its largest overseas market in the next few years.
Amazon India's performance has prompted the parent company to include India head Amit Agarwal into founder and CEO Jeff Bezos' S-team, a group of senior leaders that contribute to important decisions.
Speaking at an investor call after the e-commerce giant's first quarter results on Thursday, Amazon's chief financial officer Brian Olsavsky showered praise on the company's India operations, promising to boost investments in the country on all fronts.
"I had a chance to see firsthand the level of invention going on with both customers and sellers...it's a very exciting time in India and again, the invention is off the charts. We are inventing things in India that do not exist in other parts of the world. And the team there is one of our best," he said.
Olsavsky said he had just returned from India where he spent a week with the teams in Bengaluru and Hyderabad.
Amazon has invested more than Rs15,000 crore in its e-commerce operations in India and is seen to be inching closer to market leader Flipkart.
Olsavsky said that for the second year in a row, customers selected Amazon India as the company's "most trusted" online shopping brand.
He noted that in the last quarter, Amazon India rolled out the Tatkal programme, a studio-on-wheels that goes to sellers to help them sign up. "We let them do registration, imaging, catalog, uploads and basic seller training. So we're taking...the business to the sellers. We've already reached sellers in 25 cities and we're really helping them expand their business not only within their home region, but throughout the whole country," he said.
While profit margins from international business are lower than what it was some years ago and lower than in the US, Olsavsky said the company is making large investments in India. "We're very excited about what we see and we will continue to invest heavily in India," he said.
Phil Hardin, director of investor relations, appreciated the clarity brought about on the regulatory environment in India as it impacted Amazon Cloudtail, which is a joint venture between Amazon and N R Narayana Murthy's investment arm Catamaran Ventures.
Under the new guidelines, no vendor on an e-commerce marketplace can account for over 25 per cent of the overall sales on the platform. Cloudtail's sales are believed to be significantly higher.
"We're happy to operate in any regime. So frankly, the more clarity, the better," Hardin said, referring to the recent FDI guidelines for e-commerce marketplaces issued by the Indian government.
