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He is known to have changed the rules of e-retailing whichever market he has entered. His company Amazon entered India and has stirred up the sector in such a way that even the strong home-grown players have been forced to sit up. In an exclusive interview with Arindam Mukherjee, Amazon founder and CEO Jeff Bezos says the next wave will come from mobile, the default mode of accessing the internet for the new generation. Excerpts:
Why is the world’s attention focused on India now?
Amazon’s relationship with India started 10 years ago. We came here because we could get very good talent. About a year ago, we launched Amazon India and we had high hopes and high expectations. If this interview was happening a year ago, I would have told you that I was optimistic, but today I can tell you that it is already happening.
My enthusiasm (about India) comes from the fact that we are growing very, very fast here and when something is working that well, then only we double that investment level. So that’s what you see here, our commitment to invest $2billion.
How does India compare with other emerging economies where Amazon has gone?
Emerging or developed, this is the fastest growth rate we have seen in any of our new geographies ever in the last 19 years.
And what do you think is pushing that?
A number of factors. One, these guys have invested in a series of things like Easy Ship that enables small- and medium-sized businesses to connect with the digital marketplace. The other thing is that the growth of mobile has really accelerated things. Mobile is important all over the world but it is especially important in India. That’s one of the things we will concentrate on. Some of our $2 billion investment will be used to improve our mobile applications.
"In the US, a lot of people access the internet through the desktop, though the mobile is growing. In India, it’s everything."
How do you see mobiles changing our lives?
It’s kind of straight out of science fiction. If even just 15 years ago someone said that you that you are going to carry this little device in your pocket and it will give you instant access to not just your family members and friends but also to any piece of information anywhere in the world in real time, it was difficult to believe. I don’t think any science fiction author even predicted it. If you look at science fiction books, they predicted a bunch of things, but not this. Not the way we use it. It’s such a profound connectivity tool. It’s hard right now to predict what the impact of allowing people to communicate with less friction would be. The jet plane, nobody predicted that it will create globalisation. The car, nobody predicted it would create suburbia. There’s a bunch of things where technological innovations lead to changes in society. We humans invest in new things and new tools, new capabilities and then those tools change us.
What part (or proportion) of Amazon’s turnover happens through the mobile phone?
It varies by geography, but here in India, it is a vast part as a lot of people access the internet only through the mobile phone. In the US, a lot of it is still through the desktop, although the phone is the fastest-growing piece along with tablets etc but all over the world mobile is becoming more and more important. In India, it is almost everything.
Do you think that going forward, the mobile will be the default mode for connectivity and activities like e-commerce?
In India, it already is. In countries like the US, it’s hard to be sure but that’s the direction it is headed in.
A large part of the Indian e-commerce landscape operates on “cash on delivery” mode, which is not the most profitable and has issues.
India is not the only place where we do a lot of cash on delivery. We do that in Japan and other places where it is an important payment mechanism. You can think of it as an obstacle, and a problem or you can see an obstacle as an opportunity for invention. If the reality is that many customers in India are comfortable transacting with cash on delivery, then it is our job to figure out how to make that efficient, easy and secure.
How often do you use your phone to buy things?
My phone? I don’t know. I mean a lot. I have a professional interest in it.
There are apprehensions that the mobile phone is killing civility and creating micro universes.
I don’t know. I am sceptical about such claims only because they are made about every new technology. You could have made the same claim about a book. Most new technologies have exaggerated claims that they are going to subvert human communication and largely scary stories that don’t come true.
"Amazon India is a locally run company with a wealthy uncle in Seattle who can be called for money when needed."
What would be the next big thing for mobile phone?
If you look at the trendline over the last few years, mobile phones are getting unbelievably inexpensive. You can get very good phones now for a couple of hundred dollars. And that trend is going to continue. The displays will continue to get better, processing power is going to get better and the amount of bandwidth up to the cloud will continue to get better. Once that bandwidth is good enough and you have access to all the computation that you can do on the cloud, then the processor on your phone is not important, as you can offload a lot of processing on to the cloud. I think it’s very early. Ten years from now, I will be very amazed at what these little devices can do.
And for mobile-commerce?
I think we will have to wait and see. Most important for me are the things that are not going to change. I know that 10 years from now people are still going to want fast and reliable delivery. So we will put everything and our energy into making delivery reliable and fast as that is the kind of thing that is stable in time. It is impossible to imagine that 10 years from now someone will say ‘I love Amazon India, just wish it delivered a little more slowly and they made a few more mistakes’. So you can count on that.
A comparison is often made with home-grown local players like Alibaba in China and Flipkart in India.
In a very deep way, Amazon India is home-grown. We don’t manage it from Seattle. If we did, we would have never come up with things like Easy Ship, which is very localised to this particular geography. It’s a locally run company with a wealthy uncle in Seattle who can be called for money when needed.
The second thing is these are very big markets and there is room for multiple winners. E-commerce is not winner take all. We don’t spend a lot of time thinking about other companies and what they are doing; I have always thought that’s a distracting business approach. For 19 years, we have been largely ignoring our competitors and it has worked pretty well. We will keep that technique going.
The company that introduced the world to e-readers has bought The Washington Post. How do you see the future of the print media?
If you look at newspapers, certainly in the US, India not as much, print newspaper circulation has declined very substantially over the last 8-10 years but it has also started to level out. There was a very steep decline and now that is not declining as fast. But if you think about print versus digital distribution, the latter has a lot of advantages. But I don’t get excited about it either way because the content is so much more important than the distribution mechanism. So, we have the Washington Post and because of the distribution efficiency of the Internet, the Washington Post has become a national and even a global newspaper which would not have been practical for the Post when it was distributed exclusively on paper.