The first thing that hits you about Jeff Preston Bezos is his booming laughter. After investing $2 billion in Amazon’s India operations, the founder and CEO of the world’s largest online retail giant has lots to laugh about. Within 16 months since launch, Amazon India has become the fastest growing market for Bezos global operations with 18 million products across 32 departments. What had started with 100 sellers has grown to more than 11,500 sellers. BusinessLine met Bezos on the company’s outlook and the challenges ahead. Edited excerpts:
You recently announced an investment of $2 billion in your Indian operations. You said you haven’t seen anything like this see before. What’s driving the Indian e-commerce space?
In fact, ever since this investment was announced a few months ago, we have had to reset our goals. These guys keep blowing through this expectation.
In fact, lot of people say there are a lot of obstacles doing business in India. But our results say otherwise. The results seem to indicate that these guys here have been extraordinary and have been very inventive and going round obstacles. You know about the Easy Ship. That is a profound invention. We are going to be able to export it to the rest of the world. It was invented because India is so unusual and India has so many small and medium businesses here.
To see that as an opportunity here, it is just a fantastic insight. So it is really working.
When things are really working, that is when you want to double investments. In the early stages, we plant a lot of seeds. Some of them grow into big trees and some don’t.
When something starts working, that’s when you really want to put bigger investments.
Would it be right to say that India is one of the fastest growing markets for you, a priority market for you?
It is the fastest growing. It has gone beyond that. We have a lot of good businesses in Amazon. And we are very, very fortunate. We have Kindle, fashion and a whole lot of new categories. So you know I love all my children. I love all those businesses. But there is something special going on in India.
What kind of challenges do you face in India. With regulations governing foreign direct investment, how much do you think it is a handicap to bring all your products here?
The results would indicate that it has not been a handicap at all. Every country in which we do business, there are regulations. Our job is to accommodate those regulations. So, let us use it as an opportunity, instead of just complaining about it. If the regulations were changed, there would be even more opportunities. Our job is to accept those regulations, whatever they are and within those regulations, try to build something fantastic for customers. Here, we have two sets of customers: the consumers and small medium businesses that are providing infrastructure, things like EasyShip, make it easy to connect with the digital future.
You are doing some exciting work in the US like Amazon Studio, drone etc. Do you think some of these can be brought to India as well.
Absolutely. I don’t know what the road map and timeline is, but I see no reasons why these businesses cannot be brought to India at some point. For example, Amazon studio with its original content is a big thing. Indian cinema is a big opportunity and not just in India, there is a big export market for it. I am very excited about this opportunity.
If one looks at e-commerce companies, they haven’t actually made any profits. In fact, critics say that Amazon runs like a start-up, focusing more on growth than on profits. How long do you think you can sustain such a model.
I don’t know. When things are working, we double down on investments. The better it is working, the more we invest.
That approach has served us very well over the last 19 years in different places. That is what is happening in India. It is working so well, that we are adding more investments.
Your critics say that your smartphone and devices strategy has not really paid off. How do you plan to monetise this space?
We have a really good hardware team which we started building 10 years ago.
We launched Kindle seven years ago, we are five generations into the tablet segment and only one generation in phones. So, this is really early days.
Amazon is into e-commerce, devices, cloud services, how much of the Internet do you want to own?
We have only a small part of the e-commerce segment. In the US, we are just 20 per cent of the e-commerce market. Most people don’t know how fragmented e-commerce is. There is room for lots of winners, doing lots of different things. Our goal is always to stay heads down, focus on customers, try to identify what really matters to customers; things like speed of delivery, competitive pricing, reliable delivery, choice of products and every year get better at all of those things.
If you have to grow faster in India, isn't it necessary for you to do it the inorganic way.
Our strategy has been to grow organically. We do acquisitions from time and if there is an opportunity in India we will do it. But our basic approach is organic growth.
You have disrupted many businesses, do you fear being disrupted?
I don’t fear disruption, but I know it will happen one day. I just hope that it happens after I die. We don’t seek disruption, that’s not the goal.
The goal is to invent something what customers prefer and if you build something that customers prefer they shift to the new way and the shift causes disruption. We have been fortunate enough to do that a few times in different places, with AWS, Kindle, e-books, e-commerce and so will keep trying to invent better way.
Ultimately, lifespan of companies is not long so Amazon will be disrupted but best way to guard is to lean into future. Companies forget how dynamic the world is. They stop inventing and that’s when you are at most risk of someone coming and disrupting.
So then what keeps you awake?
I would be really disturbed if Amazon was losing customer centricity as its main ideal. We really do have a process that starts with the customer. I think that’s its deeply ingrained.
Where do you see Amazon in the next 4-3 years?
I hope that in the big things it stays the same. Customer centricity is one. The other thing is passion for invention.
I hope in 3-4 years or 10 years from now we are still inventing. I also hope we are patient and have a long term view, instead of having a quarter view. We would gamble, an educated gamble and take a 5 year view.