Amit agarwal logical salesman leads Amazon India as Online Retail taking off
It’s a Saturday afternoon in Bangalore. It’s also the weekend before Diwali, the festival of lights that sees the biggest shopping frenzy in the country. That makes it the perfect time to meet Amit Agarwal, the India head of one of the three most talked about stores in the country.
Agarwal, hand-picked by Jeff Bezos, founder of online retailing giant Amazon, to lead Indian operations, is a computer engineer from the Indian Institute of Technology, Kanpur, and has done a master’s in computer science from Stanford University, US. The 40-year-old has a slim boyish look, and is dressed formally in a blue, pinstriped, full-sleeved shirt and grey trousers.
We meet for coffee at Bangalore’s Sheraton hotel, a venue chosen by Agarwal because it is next door to the Amazon office. We place our orders—cold coffee for Agarwal and a cappuccino for me—and sit down to talk shop. It’s been a few days since Amazon’s “Diwali Dhamaka” shopping week began and Agarwal is ebullient.
“It’s beyond our wildest expectations—in electronics and home the growth was six times over the week before, in ethnic wear the growth was five times over the last week (saris were 50% of this). In kidswear, sales are eight times higher than the week before,” says Agarwal, who worked in two start-ups before he joined Amazon in 1999.
Sales on Amazon’s rival e-commerce portals, Flipkart and Snapdeal, have been phenomenally high as well. The three sites have been offering deeply discounted deals and spending crores of rupees in promotions to bag the biggest sales. This has led to comparisons with other online retailer battles around the world, notably Amazon’s battle in China with Alibaba, but Agarwal says he is not fazed. It may sound clichéd but the Amazon philosophy is not to spend time thinking about competitors, he says.
“We were the first to announce our month-long sale, it’s not that we did that because we heard anything,” he says, “anything” being probably a veiled reference to rival Flipkart’s heavily publicized “The Big Billion Day” sale.
Does Amazon India plan on being No.1? After all, it set up shop a little more than a year ago and already is, in terms of sales volumes, among the top three online retailers. But Agarwal declines to be drawn into a discussion on this.
“In my opinion, people in companies in India are too obsessed and worried about thinking about outputs like how much are sales. The problem with these outputs is that the customer doesn’t care how much your volume of sales are. I track our inputs every day, like how many items are in stock at this particular moment, what is the click-to-ship-time average for the day, how good a job we do at inbounding inventory, etc.,” explains Agarwal, adding that he has 400 goals and none of them have units in them.
“We have 18 million unique products, of which 375,000 are available for shipping the next day,” Agarwal says. Recently, Amazon India signed a strategic partnership agreement with one of India’s biggest offline retailers—the Future Group—to work together in the areas of product development, branding and marketing. “They are the pioneers of organized retail in India and have a rich portfolio of brands, but cannot reach the corners of India where Amazon can, so we hope to combine our customer insights to be able to create more value,” he says.
Agarwal, who grew up in Mumbai and attended the modest missionary St Dominic Savio High School, has been one of the architects of the famous “marketplace” model adopted by Amazon. Perhaps this was why Bezos picked Agarwal, first to be his “shadow” for two years from 2007-09, working in his Seattle office as a global technical adviser, attending meetings, even travelling with him.
“They were very exciting years; first of all you are talking about somebody who is probably the most celebrated entrepreneur of our time, and to add to that he is a great human being, successful and yet very humble, the kind of person you can learn life lessons from,” says Agarwal. He says he has not read Brad Stone’s The Everything Store that depicts Bezos as an explosive personality and a difficult boss, and so can’t comment. But he adds, “Everyone loses their temper sometimes, don’t you?”
Last year, Agarwal, who first came to India 10 years ago as part of a five-member team to lead Amazon’s development centre in Bangalore, was chosen to head the Indian operations. Foreign direct investment (FDI) rules forbade Amazon from selling directly to the Indian consumer, so it used the marketplace model, hosting other sellers and providing them with services like warehousing and shipping). “Everywhere I have had a constraint in my life, the answer has been to invent rather than be the victim,” says Agarwal.
Amazon is working with the Karnataka government to find a solution to the issue of value-added tax (VAT) payments on transactions on the Amazon India site. The state government would like Amazon to charge buyers VAT; Amazon contends that it is merely providing enabling services to other sellers, so it cannot do so.
“It’s a case where the regulations are not keeping pace with the new-age business model. This requires us to spend time working with the government, showing them as to how it works, why it’s good for sellers, for the state and for customers,” says Agarwal.
I ask Agarwal about the recent meeting Bezos and Agarwal had with Prime Minister Narendra Modi. “We listened to the Prime Minister’s vision of Made in India and digital India, and it is something we are in complete alignment with,” he says, explaining “the flywheel” effect and how Amazon could benefit “millions of small sellers”, “millions of manufacturers” and the entire ecosystem. He argues that by permitting FDI in retail, the government can empower “millions” of small manufacturers, who would be able to sell their goods through Amazon to any corner of the country. This would generate traffic, increase volumes, lower costs and benefit the customer, manufacturer and retailer.
I am persuaded and I tell him he is a great salesman. He is mildly put out. “I’m just speaking the truth, this is logical thinking, and computer scientists are very logical,” he says.
And then it’s time to go home, to his son and daughter who are waiting for him. To pack for the week-long trip to Mumbai, where the family will celebrate Diwali with both sets of parents. No shopping though, it’s all been done online.