Amazon: Amazon India is not closing business; Some experiences are reevaluated: Manish Tiwari

Amazon’s e-commerce marketplace is simply reevaluating some of the typical experiences for innovative companies, country consumer business director Manish Tiwari told ET, after the US-based e-commerce company shut down some of its verticals such as education technology, distribution and food delivery recently.

Tiwary added that the tech giant will double its investment in the business-to-business (B2B) market, pharmacy, grocery and social commerce next year.

He said, “Every year, we look at our portfolios, are these innovations working, is there a new idea?”. “When your DNA is of an innovator, you will always have some business that you will reevaluate, stop, slow down, some you will double down on… I don’t know you will do 10 innovations, and they will all succeed.”

ET was first to report that Amazon was buying social commerce platform Glowroad in April. Tiwary said Glowroad’s distributor base has grown sixfold since the acquisition.

Amazon Pay and Amazon Pharmacy — where it works with Apollo — will also be areas of focus.

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“For a long time, we have provided pharmacy sandbox in Bangalore. Now, you can get it in 16 cities on the same day. Fresh (grocery field) was available in 14 cities and now we have expanded it to 30 Tiwary 2 and Tiwary 3 cities,” said Tiwary.

A veteran of Hindustan Unilever, Tiwary joined Amazon in May 2016 and was promoted as Country Director of Amazon India’s consumer business earlier this year.

He said that despite the downsizing of the business in India, the performance of the business in India was in line with the expectations of the US company.

India remains an exciting market for Amazon, he said, adding that he has recently begun laying out the company’s annual plan with the leadership team in Seattle.

Investment opportunity in India

“We’ve been around for nine years as a market, we’ve just revised our annual plan commitment worldwide, and we remain excited about the India opportunity from nine years ago,” he said.

India is among the few economies in the world where the macroeconomic situation is good, so the company’s outlook is in line with that.

“The ecosystem we’ve built in India like Prime Video, Amazon Pay is getting a lot of traction,” he said. “We continue to invest in things that are very important to our customers and our vendors. Whether it’s infrastructure, content, driving UPI or improving delivery speed, team leadership around the world also believes in it,” Tiwari said.

Recently, Amazon CEO Andy Jassy said the tech giant had excess storage capacity as it was doubled by two years of the Covid-19 pandemic that accelerated demand.

Tiwary said unlike North American markets, Amazon India does not have the problem of overstorage and will not shut down capacity in large numbers.

“We are happy with what we have, and we will continue to invest in new spaces,” he said.

Amazon faced stiff competition during the holiday season, with Flipkart Group taking the lion’s share of the market at around 60%, according to research firm RedSeer.

Sources tell ET that Amazon is losing stake in Metro, which is its traditional stronghold.

However, Tiwari dismissed the claim saying that Amazon had the best Diwali sales period ever and that he was not interested in competition.

“What we care about are three things — new resellers, new customers, and Prime customers. As long as this is moving, the flywheel is going to keep moving,” he said.

According to a report by brokerage firm Bernstein, Amazon India has about 5 million Prime customers in India, and its subscription programs for faster shipping that come bundled with free streaming services locally.

Life After Cloudtail Closes

Regarding the challenges new sellers faced after Cloudtail, the former largest seller in the market closed due to new regulations, Tiwary said that new sellers, who have taken over Cloudtail, will increase in time.

ET reported on July 8 that sales are starting to decline on Amazon for some brands due to teething issues after Cloudtail’s transition. ET also reported on Aug. 15 how these new vendors have hired former Cloudtail and Appario executives to run operations.

“A lot of people have moved from Cloudtail to these new vendors, but we’re not the ones making those transitions, it’s the vendor that’s making this happen,” Tiwari said, emphasizing the company’s disconnect from the vendors on its platform.

“I haven’t heard anything from the brand per se. It takes time to build capacity. I don’t see it as a transition. It will take time to expand capabilities. We had our best Diwali. If you look at Prime Day and Diwali, the vendor ecosystem he is working well “.

Cloudtail operated under a joint venture between Amazon and Infosys founder NR Narayana Murthy’s Catamaran Ventures but closed operations as an Amazon seller amid regulatory pressure.

Indian regulations do not allow any foreign-owned entity operating an online marketplace and its group companies to own stakes in any seller on the platform or control their stock.

Amazon said on Oct. 31 that it would also close operations of Appario, another seller entity in which it has a direct stake.

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