SHOW US THE MONEY

Even after investing more in India than Flipkart and Snapdeal combined, Amazon’s Jeff Bezos says it’s still “day 1”

Obsession
The Next Billion
Quartz india
Obsession
The Next Billion
Quartz india

Amazon’s bet on the nascent Indian market, where internet users are set to double to 730 million by 2020, is paying off—or so it would like everyone to know without offering too much detail.

In a press release announcing its first quarter earnings today, the company went out of its way to tout progress in the region, with the only statement from CEO Jeff Bezos focusing exclusively on India.

“It’s still Day 1 for e-commerce in India,” said Jeff Bezos, Amazon founder and CEO, among those comments. “I assure you that we’ll keep investing in technology and infrastructure while working hard to invent on behalf of our customers and small and medium businesses in India.”

So far, Amazon has invested upwards of $5 billion in the country, exceeding the combined investment of two of the biggest domestic players, Flipkart and Snapdeal. Considering Bengaluru-based Flipkart was founded in 2007, Amazon, which arrived in India in 2013, is working hard to catch up and undoubtedly making real progress. Snapdeal, meanwhile, is likely looking for a buyer.

Last July, Amazon India launched the Rs499-a-year Prime program in over a hundred cities, offering one-day and two-day delivery on some items, as well as exclusive discounts. Although Amazon did not disclose the official numbers, at least one estimate pegs the number of Prime subscribers in India at more than 5 million, about a third of all Amazon customers in the country. In today’s announcement, Amazon credited part of its performance in India to increasing the selection of Prime-eligible goods by 75% over the last nine months. The company also boosted its fulfillment capacity for sellers by 26% this year.

Despite making strides in India, North America remains Amazon’s most important market. International net sales grew 16% in 1Q 2017 from the year prior, compared to 24% growth in North America.

Beyond e-commerce, Amazon has just started pushing into India’s entertainment market.

A few weeks before the quarter ended, it introduced the Fire TV Stick in the region. The streaming device came with three months of free data, as well as voice search support for Hindi, and could serve up 1080p video on TV sets from Amazon’s own Prime Video service, and others such as YouTube and Netflix.

There’s even more potential beyond TV screens. A mobile-first nation by nature, nearly half of Indian’s under 25 population is comfortable consuming entertainment on-the-go on devices other than a TV. Add to that the fact that nearly 9 in 10 households are single-TV homes and the on-demand video space shows immense opportunity. To chase it, Amazon has announced 18 Indian original TV series since the end of 2016.

While rival Netflix has etched a deal with megastar Shah Rukh Khan and debuted comedian Vir Das’ Netflix special ‘Abroad Understanding,’ Amazon has Netflix beat by far in terms of the sheer number of partnerships. The likes of Karan Johar-owned Dharma Productions and Mukesh Bhatt’s Vishesh Films have signed deals with the platform. Prime Video also has exclusive specials of 14 popular stand-up comedians and comedy groups—East India Comedy, Kanan Gill, Biswa Kalyan Rath, Zakir Khan, and Naveen Richards, among others—queued up from May 2017 onward. Comedy group All India Bakchod, which currently airs a web series on local video streaming platform Hotstar, will also be doing an Amazon original series titled The Ministry.

In the coming quarters and years, the India push—more shows, more sellers, and possibly a brick-and-mortar presence—will likely have a real impact on Amazon’s results. Maybe we’ll even get some real numbers.

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