Though currently e-commerce players cannot offer discounts — only sellers on their platforms can — the general perception is that online players are controlling pricing decisions.
By Asmita Dey
The government has once again started discussion on the e-commerce policy to check deep discounts offered by various sellers. Though currently e-commerce players cannot offer discounts — only sellers on their platforms can — the general perception is that online players are controlling pricing decisions. The government, therefore, is trying to tie up loose ends so that loopholes can be plugged. Amazon Seller Services director and GM Gopal Pillai tells Asmita Dey of FE that Amazon’s principles are aligned with the government’s policies and it is helping small businesses grow. Excerpts:
Amazon has always maintained that India is a very important market for the company. The government is coming out with a new e-commerce policy to curb deep discounts and restrict predatory pricing. The commerce minister has said dominant e-commerce players may be brought under the ambit of the competition law if they abuse their position. Your views on the whole issue.
I cannot comment on specifics without knowing the exact sources. But what I can say is that we have been working with the principle that if sellers are not successful, even Amazon would not. We work with small and medium enterprises, make them successful and that’s the only way we will also be successful. In short, our practices are aligned with the government’s policies and we help SMEs.
How was the response to the Small Business Day on December 16 which offered a platform to smaller players to sell on your portal?
It was fabulous, much better than we expected. We knew that customers would come back and support SMEs, but we had thought buyers would come from some parts only. But it turned out that buyers came from different regions, which means that support from buyers across the country was even. Small businesses that participated in selling saw 1.4x growth in their sales compared to a normal day sales. In categories like artisan and weaver, sales growth was 1.6x and some companies like TRIFED saw a 400% growth over a normal day.
Then why do small traders complain to the government against players like you?
We started with 100 sellers. Today, we have 400,000-plus sellers. We are always for small businesses. More than 80%-90% of our sellers are small businesses and more than 50% of our sellers come from tier II and III cities. We have thousands of ‘crorepati’ sellers. If we had been supporting only big guys, those ‘crorepatis’ would not have evolved. We have thousands of millionaires in making. And more importantly, in global selling, all our big guys are coming from tier III and IV cities.
What is the FY20 business plan for Amazon Seller Services?
Our focus will be to better our inputs like selection, pricing and delivery. Providing good customer experience is going to be critical to our strategy. So, we will continue to make investments to improve experience. From a seller perspective, we saw a good progress on making innovation in mobile app. The efforts are paying off. More than two-thirds of our seller customers use mobile app. In other established countries, mobile is a secondary scheme whereas in India it is a primary scheme. So, we are going to put disproportionate investment in making mobile work. We want to experiment fast. We will continue to run lots of pilots like the Small Business Day. Without experimentation, you never win. That’s been our mantra. Vernacular (providing support to sellers in local languages) is continuing to be a focus area and continuing to provide more and more prime eligible selection is another focus area.
How is FY19 looking in terms of numbers? Your revenues have been growing but losses too have been rising. When are you expecting to post profits?
We are here for long term. And to drive the right kind of behaviour and right kind of change and right kind of transformation, it is going to take some time. I am not in a position to comment on the exact numbers, but what I can say is a lot of things that we invest are long term seeds and it costs us a lot of money. Our fulfilment centres are multi-million-dollar investments and they are built with same standard that we would build in New York or Chicago or any part of the world.
We have more than 50 such fulfilment centres (in India) And investments we put in to develop artisans and weavers are not cheap. It is going to take time for results to show. We are extremely pleased with the results we are seeing now. We have long-term focus.
In terms of revenue and market share, are you the leader in the Indian e-commerce sector?
Absolutely. Inputs and the data points are very clear. Amazon has been the most visited website, most downloaded app and most engaged mobile platform over the last few years. We have been leading all three sites of traffic without any doubt. We have the widest selections — 170 million selections. Customers want choice. And 50-plus fulfilment centres are operating at complete engagement from sellers.