SMBs will move the needle on digital growth in India: Amit Agarwal
New Delhi based Sirona Hygiene, which sells personal hygiene products for women saw their e-commerce exports business grow nearly 4X through Amazon Global Selling, pointed out Amit Agarwal, Global Senior VP and Country Head, Amazon India, while speaking at an event organized by Resurgence TiEcon Delhi NCR. Agarwal said those companies, which are able to reinvent themselves and respond to shapeshifting challenges will be more relevant and resilient in the future, akin to how the STD booths transformed to mobile recharge centers and stationary shops became digital printing centers. “There is a need for every business to reinvent as a digital business. Today we have 100,000 corner shops working with Amazon, which act as pick-up-points and or last mile delivery centers, geared to serve local communities," he said.
'SMBs will move the needle on digital growth'
Convinced that small and medium businesses have the potential to move the needle on digital growth, Amit Agarwal highlighted Amazon's commitment to small and medum business (SMBs). He said Amazon has pledged to invest US$ 1 billion to digitise SMBs, create one million jobs and enable $10 billion in cumulative e-commerce exports by 2025. He said that SMBs will be key in leading India’s economic recovery in a post-pandemic world.
At the moment there are 700,000 sellers on Amazon.in and nearly a million women entrepreneurs, weavers and artisans, who are seeing success with Amazon. He said nearly 1.5 lakh new sellers who joined Amazon.in in 2020 alone and of these 50,000 joined using the Seller App in Hindi and Tamil.
We are far more obsessed with customers than competition, I am not saying it’s a perfect strategy, but it works for us.
Amit Agarwal has been with Amazon for over two decades and fondly remembered the early days of Amazon India between 2012 and 2013 when online purchases were infrequent and mostly cash-on-delivery driven. “I remember going into electronic stores and waiting for the owner to show up, talking to him about online selling and taking him through the listing process,” he reflected, adding "That same principle of seller education still holds true We need to empower businesses digitally and get out of the way to let them grow,” Agarwal said.
'Deep discounting is ultimately unaffordable'
Responding to criticism that Amazon is hurting small businesses through discounts, Agarwal said, “Deep discounting is ultimately unaffordable. There is massive wastage between production and consumption, which can be arrested by using the right technologies like automation for example. Artifical Intelligence and Machine Learning are levers that enable navigating diversity at scale and we have invested in these verticals so that we can create meaningful impact at scale. We optimize the flywheel of offering choice, driving traffic, engaging sellers and selection and this is what reduces cost of operations, increases savings and ultimately, helps lower prices. This is often painted in a different light." he emphasized.
Multinational companies often have strategies in place to capture geographic uniqueness when setting up shop in a foreign country, but Agarwal said Amazon started out connecting the dots not delving into nuances. “We had faith that people wanted more convenience, value and selection of products, all stitched together with time bound and reliable service, which is similar in all the geographies we operate in. Yes, we tailored the mechanism of delivering these experiences but overall, we were not distracted by difference,” Agarwal said.
'Make in India' will go global in an unprecedented scale...and all of this is going to create a digitally robust business ecosystem across the country that is going to power millions of livelihoods. And all this is going to help us realise that vision of Atmanirbhar Bharat and e-commerce is going to play an important role.
'Make in India will go global'
Despite all the momentum, the headroom for growth is immense. Less than 3% of total retail consumption in the country is led by online sales. "What I predict is that you're going to witness a kind of structural shift that propels us faster towards this vision of Digital India. 'Make in India' will go global in an unprecedented scale, you're going to have Indian brands become global brands and all of this is going to create a digitally robust business ecosystem across the country that is going to power millions of livelihoods. And all this is going to help us realise that vision of Atmanirbhar Bharat and e-commerce is going to play an important role," according to Agarwal.
Prioritizing customer obsession versus competition
Taking on unprecedented challenges can lead one to obsess over a clear, competitive advantage but Agarwal thinks differently. “Look there will be different models. We are far more obsessed with customers than competition, I am not saying it’s a perfect strategy, but it works for us,” he said. It comes with dangers, customer obsession can be a bit of a paranoia because it leads to compulsively asking why one should choose you again and again, are you doing enough to retain customers, Agarwal points out, adding, “But that is why we hire pioneers and nurture a culture, which is more risk taking and long term focused. It makes us think about innovation, both continuous and discontinuous."
"Continuous innovation builds efficiencies such as reducing customer service contacts per unit. Discontinuous innovation relates to the idea that when a company grows, everything grows in scale, including the size of failure. We strive to be preemptive so that even unarticulated needs are met. Launching Alexa is a classic example. I doubt people were in favor of a device they could talk to as an idea but clearly, it is a winning innovation,” Agarwal said.