In 1995, Amazon started in the US as an online book store. Eighteen years later as it makes its entry into India, the world’s largest online retail company is starting with selling books and movies.

But the India Web site is short of what Amazon offers in other countries because current foreign direct investment rules do not permit any foreign online retailer to sell its own products.

Therefore, it is selling third party products on Amazon.in. Business Line met Amit Agarwal, Vice-President, International Expansion, Amazon.com, to know how the company plans to overcome regulatory hurdles and succeed in a market where most other ecommerce sites have struggled to make money.

Why has Amazon decided to enter the Indian market now?

We are ready right now to deliver the experience. It’s important to bring all of what we are offering as an integrated piece.

In terms of our ability to take into different parts of the world, we have delivered a lot since 1995.

But we are saying that despite having started as a company in 1995 it’s still day one in the US. In India, the market is so nascent.

We have a long-term view and you would see us invest here.

You have launched a marketplace for third party sellers and not your own products. Will this impact your business outlook in India?

Clearly, if the regulation did not disallow us to participate, we would have launched exactly the same platform as in other nine countries. We hope the Government would allow us in future as it benefits users to get more selection. However, constraints drive innovation. We have learnt not get victimised by constraints. Wherever that hinders we will find a way. At this point of time, we are focussed on what we can offer in India. Yes, we would have got another tool to improve consumer experience if regulations permitted and we could have done more. But not having it does not mean we will sit and twiddle our thumbs. Maybe we have to innovate and do heavier lifting, which then we can take it to other market as learning.

How will you deal with Indian mindsets towards quality of products sold online? There are other issues related to perception towards payments and poor Internet penetration. How will you deal with these challenges?

It is a nascent market in India. If you go back to 1993-94, the same things were happening in the US. We would have to work towards overcoming these issues. It won’t happen overnight it would take years. We need to have patience and India won’t be any different to any other larger markets. At the end of the day, it all boils down to how convenient we can make it for users to buy products online and once they purchase how we can make it a good experience.

What different are you offering to sellers on your site?

We are making it easy for sellers by offering to do the heavy lifting for them. Issues related to packaging, taxation, logistics will be taken care by us.

They pay for storage space per cubic feet and a one per cent referral fee. This relates to huge savings for the seller, which can be passed on to making the products cheaper for the user.

For example, if a retailer were to ship a book through courier, it would cost you Rs 30-40. Then you may have to pay another Rs 25-50 for cash on delivery.

Essentially, you are paying Rs 100 for just getting the book delivered. We do it all of that for a standard fee of Rs 60.

We charge on a pay-as-you-go basis, which means you pay on the units sold.

This is a very attractive proposition for sellers.

> thomas.thomas@thehindu.co.in

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