- 2018-10-12
Amazon wins in India
Jeff Bezos invested US$5.5 billion in the Indian market and chose Amit Agarwal to manage these funds. Amit Agarwal grew up in Mumbai, India. He respects his boss, Bezos River Hollywood star Amitabh Bachchan. Agarwal is 44 years old and is currently localizing Amazon.
Amazon has established a credit business for those Indians who do not have a bank account, and at the same time launched a simplified version of the mobile phone APP, this simplified version of the APP can be used on cheap mobile phones, so that hundreds of millions of people living in small villages in India Indians can shop. As long as you log in to the simplified version of the app, Indians can purchase a variety of goods.
So far, Amazon still faces many difficulties in the Indian market. It has been in the Indian market for 5 years and has spent billions of dollars in the process of competing with the Indian local market. Amazon's rival in India called the Flipkart online service company in Bangalore. Flipkart has been in the e-commerce business for many years.
Although India's land area is small, India's population, culture, and language vary greatly. Unlike the United States, the domestic language and culture are relatively unified. It is relatively easy to sell goods online in big cities, but in backward areas, smart phones are not yet popular, the popularity of electronic products is relatively low, and the Internet is not developed. It is very difficult to sell goods online.
Agarwal said: "In Western India, shoppers make online purchases through mail orders. We decided to start with the most basic things. Half of the US$5.5 billion fund will be used to build a logistics system and build distribution stations, warehouses and other facilities. "The scale of Amazon's international business losses last year exceeded 3 billion U.S. dollars. Most of the losses came from the expenditures on building logistics systems, digital payment systems, and warehousing systems in India.
Agarwal returned to India in 2013 after working at the Amazon headquarters in Seattle for nearly 15 years. In the first two years of returning to India, Agarwal proved that e-commerce is not limited to urban areas, and it is not only accepted by Indians who can speak English. Agarwal said that Amazon has 150 million registered users in India, 300,000 merchants, and more than 160 million products sold. Moreover, the growth rate of e-commerce users in India is also very fast.
India does not have a complete logistics and distribution system. Amazon has spent a lot of money to build its own logistics network to solve the last-mile delivery problem. Amazon's logistics force in India is composed of motorcycles and tricycles. Amazon's supply stations in India have reached 44, and they are mainly located in rural areas. This project is called "I Have Space". This project involves 17,500 stores and small warehouses in 225 cities.
Even if Amazon has built a complete logistics infrastructure in India, there is still a lot of work to be done. Amazon also needs to train people who have just shopped online and tell them how to do it. Amazon cooperates with some stores in the neighborhood. Store owners can show online shoppers how to shop online, help them compare product features and product prices, and then tell them how to place an order to buy their favorite products. In this process, Amazon will also pay the store owner some training fees.
Gautam Chhaochharia, head of the Indian research department of UBS Group AG, said: “The situation in India is more complicated. India is still in the early stages of e-commerce, so retailers cannot ignore the problems of other physical stores or virtual infrastructure. ."
Almost half of Agarwal's team members are applying Amazon's technology to solve India's problems. Amazon has developed a simplified version of the APP in India called Micron. This APP has simple functions and takes up less space. If the software senses that the phone version is lower, it will automatically download the update. Amazon's engineers have also found out that the space occupied by the video can be reduced without reducing the quality of the video. Amazon is also teaching the Alexa digital assistant to translate the language on the Echo into English and native languages that native Indians can understand. Amazon's website in India uses both English and native Indian languages. Agarwal believes that using Alexa to search Amazon products will become a very common application scenario in the future.
For companies developing e-commerce in India, payment is another big obstacle before them. The reason is that the popularity of credit cards in India is still relatively low, not to mention mobile payment or digital payment. Based on the specific situation in India, online shoppers can choose a variety of payment methods: cash payment, cash on delivery, credit card payment, and plug-in payment without handling fees. You can pay on the old phone of the old version, but you can get a discount when you pay with the new device. Based on deep learning machine calculations, Amazon provides digital credit services to a small number of shoppers in India, who can make small loans.
Last year, Amazon obtained a license to operate Amazon's payment wallet in India. This kind of business is opened for the first time in the world, and the customer of cash on delivery can ask the delivery staff to upload the money to his electronic wallet. This is also a strategy to make more online shoppers get used to digital payments.
Can Amazon's efforts in India meet the challenges posed by the e-commerce Flipkart and mobile payment operator Paytm, which are backed by local funds from India? Flipkart and Paytm have grown rapidly, and they have invested a lot of money in the market and logistics system. Agarwal said: “The challenge brought about by the crazy investment of competitors can only illustrate one problem, that is, this market is huge and full of opportunities.” Finally, he quoted Bezos as saying that from the first day we entered this market, we I decided to stay in this market for 100 years.