‘India needs enabling e-comm policy’

Madhav Chanchani | TNN

Mumbai: India should focus on a “stable” e-commerce policy environment that is far more “enabling” to the business, than come up with rules that can “impact investment or constrain growth” to cater to a small set of “disgruntled sellers”, said Amit Agarwal, India head and senior vice-president at US-based online retail giant Amazon.

“India could probably do more to think about a policy landscape that is far more enabling for an industry which is still so early in its evolution,” said Agarwal in an interview. These were his first comments on the updated e-commerce policy released in December that caused disruption in operations of companies, including Amazon and rival Flipkart, which is owned by US retail major Walmart.

“There are a lot of areas where policy intervention is needed to unlock growth, and energy is better spent on those,” he added. Agarwal gave the example of 30 forms that merchants need to fill when they are shipping a product to an overseas consumer — “doesn’t make sense for a country which wants to take ‘Make in India’ global”. ‘Make in India’ is an initiative launched by the government to promote locally manufactured goods. Amazon had recently said that Indian sellers on its global platforms, like the US and the UK, have sold products worth over $1 billion in the last three and a half years. The target now is to reach $5 billion in four years. The updated e-commerce policy had put a series of curbs on how both Amazon India and Flipkart operate — restricting discounts, blocking ownership in sellers on the marketplace platform, and disallowing exclusive product launches — forcing them to restructure operations. But overall sales did not see a major impact.

Several local e-tailers like Snapdeal and ShopClues had come out in support of the updated policy, which favours local players. The government also released a draft e-commerce policy in February which restricts the flow of customer data outside the country. Agarwal said that Amazon continues to engage with the government and gives inputs when they are sought, while the company continues to be compliant with latest regulations. Amazon India is also now focusing on introducing and expanding initiatives that will help it win the next 100 million consumers, while also adding services through which its existing 100 million consumers spend more on the platform. 

Another major area of focus for Amazon is the grocery space, where Agarwal feels the business needs “to be built over the years and not something you scale in a hurry”. Amazon recently picked up a 49% stake in Witzig Advisory Services, which acquired retail chain More that has more than 500 outlets across the country. More is a seller on Amazon’s grocery delivery application Prime Now along with several other offline retailers.

Amazon has also reportedly held talks to pick up a stake in Future Retail. Amazon is competing with e-grocers like Alibaba-backed Bigbasket and SoftBank-backed Grofers besides Flipkart in this space, which have focused on the next-day delivery market. 

But Amazon plans to ramp up focus on instant two-hour delivery with this network of investments, which will allow the firm to make fulfilled orders quickly rather than wait for it from a warehouse outside the city. 

“I think next-day grocery makes no sense. People want it fast…More allows our customers to get their grocery in two hours and is a great way to give convenience to our customers,” said Agarwal.