The sudden withdrawal of Rs 500 and Rs 1,000 notes from the Indian market led to a windfall across various sectors, e-commerce being one of them. Sales dipped initially as many companies withdrew their Cash on Delivery (COD) service owing to the paucity of cash in the hands of the consumers. But now slowly, things have started to fall in place, as more and more consumers are adapting to the digital mode of payments and with the host of exciting offers, each player has on plate.
Commenting on the impact of demonetisation on Amazon India, Amit Agarwal, Vice President and Country Manager from the company said, “One of the things worth understanding is that consumers use cash in many cases because they don’t trust a service. On the other hand, Amazon has always been very focussed with customer experience over the last three years and have been rated as the most trusted brand. We already had a significant share of digital and prepaid payments on Amazon India. What demonetisation has helped to do is to push that even higher. So it has actually been great for us and we are seeing a lot of customers move away from cash to digital methods.”
Agarwal further spoke on the impact of the immediate withdrawal of COD post demonetisation, advertising budget if it will get affected, challenges in the Indian market for the e-commerce category and the initial response of Amazon Now.
When you had stopped COD for 48 hours, did it impact your sales?
Yes absolutely it did impact our sales, when you stop COD for 48 hours, without any advance notice, the customer is bound to face some problem. But we did that so that our logistics team could stabilise their operations and get comfortable dealing with the new notes. Now we are back to normal.
Roughly, what is the percentage of transactions that is happening online as compared to cash after demonetisation?
We don’t share the mix, but from all what we heard, Amazon is very unique in their high share of digital payments added with fantastic service and customer trust.
What is your take on demonetisation and how will the e-commerce category benefit from it?
Personally I don’t have an insight on how demonetisation is impacting e-commerce, but I think the idea of a cashless society is noble and it is a right direction for consumers, businesses and for the country. It is a long term vision and I am looking forward to participate in it.
Will there be a cut in the ad spends because of demonetisation?
We don’t really talk about our spends, but all I can tell you that every single quarter, we have been growing triple-digit year-on-year, even though the landscape has been mostly flat or negative. Personally this year, has been the most exciting year for Amazon India.
What has been the response of Amazon Now (2-hour delivery service that offers popular consumer products)?
The response has been really amazing; we have recently expanded Amazon Now out of Bangalore to Mumbai, Delhi and Hyderabad. Customers love this service and we are quite excited about it.
What are the challenges which are still prevalent in the Indian market and how do you plan to overcome them?
I think e-commerce in India is at a very early phase. Our focus is how do we invest in infrastructure and innovation that makes it easier for any consumer or seller anywhere in India to shop online. It requires a lot of infrastructure build out, all the way from logistics, to payments, to seller training and that requires technology and hard infrastructure and that is what we are focussed on. This process is going to take many years and we are very early in the life cycle.
We have a very long term orientation when it comes to thinking about India, we are barely getting started and as I have often said, it is probably, not even minute one of day one. So you will continue to see us investing and adding, more selection on our platform, ensuring that we make it cost-efficient for our sellers to operate their businesses, so that they can offer great prices.