Samidha Sharma,

Boby Kurian & Asha Rai | TNN

A
fter his photo-op on top of a tra-
ditional lorry full of merchan-
dise, Amazon CEO Jeff Bezos
spent some time with TOI talk-
ing about competition, Flip-
karts hoardings, infrastructure and why
India puts a spring in his step.
Is this your first time in India?
No. I was here about 5 years ago for two
weeks. One week of business which was in-
credibly fun; I started in Bangalore, went to
Chennai and Hyderabad. I then added a one-
week vacation and did all the normal tourist
things. Went to Agra and saw the Taj Mahal.
Varanasi was just incredible. I took my then
9-year-old boy with me. And, yes, we saw the
dead bodies.I have four kids. It has become
a kind of family tradition to take a kid along.
Actually, I had invited my wife to come
with me and she said, Its a good idea but
why dont you take Preston (eldest son) in-
stead. I said: Preston? How will that work?
What will he do when I am in meetings? She
said, Put him in a conference room, give
him a book to read. I did it and it was won-
derful. Now I have started doing it with each
of my kids. I find India very energetic and
very energizing. When I leave India I find
that extra something in my step. I feel good.
How has Amazon fared in India so far?
India is the fastest among any of our geog-
raphies to ever grow to this scale. I know this
team extremely well. I have worked with
them back in the US for many years, before
they came here to start Amazon India. We
are just a year old and have already blown
past the initial goals. You dont see this level
of speed of success very often in a new ge-
ography. Thats exciting.
Should Amazon have entered
India a little earlier?
Based just on the results, it would appear
that we came at just the right time (breaks
into his famous laugh). You can be too early
or too late. Every once in a while you get it
just right. Our timing in India has been right
but the credit goes to the hardwork and in-
ventiveness of the team. In addition, this
team has been doing a lot of invention which
we might export to the rest of the world.
Give us an example...
An example would be the Easy Ship pro-
gramme: direct shipments from small and
medium sized merchants. India is very unu-
sual in terms of the number of SMEs you
have. Building the infrastructure and capa-
bility features to allow those people to get
involved in the digital e-commerce space is
important. Thats not something we have had
to do in other places. But its been so success-
ful here, we think it could actually work in
other geographies as well.
For Amazon, Flipkart and Snapdeal would be
the two biggest competitors in India. How
difficult is it for Amazon to compete?
Amazon brings tremendous assets when we
start to do business in a country like India.
All the software base that we have honed
over 19 years; all of the matrix and proce-
dures that we follow to improve the custom-
er experience and the culture of thinking
long term. We always had these high quality
people in India, long before we started the
retail business. We have been able to recruit
a world-class team very quickly. We are in a
really good position. If you had asked me a
year ago, I would have told you I was opti-
mistic. Now I can tell you that it is already
happening, which is better.
Did you see all the Flipkart hoardings
welcoming you into town?
No, I heard about it. (Again, the booming
laugh)
Your competitors say that you are
in panic mode?
For 19 years we have succeeded by staying
heads down, focused on our customers. For
better or for worse, we spend very little time
looking at our competitors. It is better to stay
focused on customers as they are the ones
paying for your services. Competitors are
never going to give you any money.
I am not saying thats the only approach
that can work. I can find examples of com-
panies that are very competitively focused
that have been successful. But that is not who
Amazon is. Thats not us. We have to be true
to ourselves. We started out as pioneers 19
years ago in e-commerce. All the people we
have attracted over time have liked that.
We will plant seeds and wait for those
seeds to grow into trees. Sometimes they do.
Thats whats happening here. Sometimes
they dont. Thats OK with us. We will just
plant another seed.
Many of the seeds have grown into trees:
digital strategy, Amazon Web Services and
our retail businesses. We dont claim that
our approach to business is the right ap-
proach; we certainly dont think thats the
only approach. We just claim it is ours. I am
delighted its being done so well here.
Where is the $2 billion investment you
announced for India being deployed?
A lot of that is going into infrastructure, new
fulfillment centres, customer acquisition,
new product categories, payments, new tools
to make it easier for SMEs to get online, into
mobile. Mobile is important all over the
world, but it's especially important here.
India is a big country, theres a lot of in-
vestment we can make in infrastructure to
help get products to customers faster. The
team here will prioritize. We cant make
those decisions from Seattle. If we see some-
thing working, we like to put more invest-
ments into that arena.
India is an infrastructure-deficit country. Will
your outlay on building infrastructure here be
bigger than in other markets?
Certainly, on the transportation side, I
would say thats true. But theres also some
opportunity to build infrastructure from
scratch. When you think of facilitation
commerce between small shops and the
end-consumer there would be things
you would build I dont know what
they are, we will have to invent
some of these things that you
might not build in other geogra-
phies where infrastructure grew
for different purposes.
Does customer-centricity allow
you to sharply focus your strat-
egy, your vision?
It does. For example: sometimes
people ask me whats gonna
change in the next 10 years. For
me, an even more interesting
question is what is not going to
change over the next 10 years. The
things that are stable in time are
those which you can build your strat-
egy around.
The three things that I know for sure
the Indian customer will still want 10 years
from now: vast selection, fair, competitive
prices and faster, reliable delivery. All the
effort we put into adding energy into
our delivery systems, reduc-
ing defects and making the
customer experience bet-
ter, I know those things
will be appreciated 10
years from now. We could
build a business strategy
around that.
Other stakeholders, in-
vestors, partners and
competitors see you
as extremely hostile.
How do you view this
image of Amazon as
a relentless behe-
moth?
I know how to
make our com-
petitors happy.
All we have to do
is raise prices,
reduce selection,
deliver slowly,
and add defects.
But thats not
our job. Our job
is to do the very
best we can
keepi ng t he
customer in
mind. Custom-
e r s g e t t o
choose where
they want to
shop. We work
extremely hard
al l over t he
world to increase
selection, to speed u p
delivery. Our number o n e
job is to earn their trust. It is no
different than how you earn trust
as an individual. You make promises
and you keep them.
Youve been branded as a company
which is great for consumers but not
for shareholders and investors...
I like a quote from Warren Buffet
who famously said: You can hold a
ballet and that's okay and you can
hold a rock concert and that's okay.
Just don't hold a ballet and advertise
it as a rock concert. Are we holding
a ballet or are we holding a rock concert?
Then, investors get to select.
They know we have a long-term view-
point. They know that we take cash flow that
gets generated from our successful busi-
nesses and invest in new opportunities. In-
dia is a great example of that happening.
Investors who do not want that approach will
invest in other opportunities. When you
think of investors, you have to remember
that these are big groups of people who are
all different and have different investment
horizons, ideas and approaches. You are not
trying to win a popularity contest across all
investors.
Alibabas hugely successful IPO is just behind
us. What does that mean for e-commerce?
Investors have been looking at internet com-
merce for many years. I'd say over time inves-
tors have gotten very sophisticated. If you
go back, like to 1999, during the internet bub-
ble, investors did not know what to make of
things. It was confusing to everybody. But
now these are real companies with real rev-
enues and real cash flow. Investors have
gotten quite comfortable, confident and un-
derstand nuances. They can see different
things. Theres also a broad understanding
that there is room for lots of winners and
its not a winner-takes-all kind of industry.
Does Alibabas profitability put pressure
on Amazon to book profits?
Amazon has some business arenas
where we are very profitable and
then we reinvest in new opportu-
nities. Thats part of our ap-
proach. Im glad we have so
many opportunities. It
is a positive sign
but again thats
just our way of
doing business.
Do you
have any
new ideas
on how to run
a newspaper?
Well, you know that
I bought The Washing-
ton Post. They already
have a terrific newsroom
and an investigative report-
ing team. They have all kinds
of good coverage; we are
growing the paper and its
very exciting. Internet pro-
vides for global distribu-
tion at low costs.
News-
papers have
historically had two
customers the advertiser and the read-
er. Personally, I believe that the way you
serve the advertiser-customer is by first
serving the reader-customer. What do
advertisers want? Readers. So you have
to stay focussed on the reader. You have
to make the best product for the reader
and, then, when you have lots and lots of
readers, thatll make your advertisers
happy.
Will it become like The New York Times?
Id like it to be its own kind of thing. So
Id resist calling it that. But in terms of
distribution, it needs to first be a na-
tional and then a global newspaper.
Will you buy another paper?
(Laughs) Why? You have one for sale?
Lets talk later.
Why did you introduce an Amazon
Buy button in between The Wash-
ington Post online stories?
I did see something in the press
about that and then I read that it was
there for six hours or something. I dont
know. You will have to ask the Post, its not
my day job.
Youve been quoted as saying this to an ex-
Amazon employee: Treat Google like a moun-
tain, you can climb the mountain but you can't
move it.
It doesnt sound like me but I never say 'No'
to that question if it turns out its me as Ive
said a lot of things. I dont remember that.
By the way, Im quoted as saying a lot of
things I havent said. Goes both ways; some-
times I have said some things, sometimes I
havent.
Is Google the biggest rival for Amazon today?
I resist getting in to that kind of conversa-
tion because it is not how I think about our
business. There are companies who in their
annual planning process literally start with:
Who are our three biggest competitors? And
they'll write them down. This is competitor
number one, two and three. Then they'll de-
velop strategies for each of them. Thats not
how our annual planning is done. We do have
an annual planning process and actually we
are right in the middle of it now. We start
with,Whatll we deliver to our customers?
What are the big ideas, themes?
You have spoken at Princeton, your alma
mater, about being gifted and being kind, and
why the latter is a difficult choice.
In fact, thats something I try to teach my
kids and young people when I meet them. I
often meet college interns at Amazon, and
on college campuses. I figured this out when
I was 30 years old or so. You know it's really
easy when kids are growing up. You can
say to them, You're so clever, that was so
easy for you. You can only be proud of
your choices and I think a lot of young
kids get the wrong feedback early on. You
must praise them for the hard work that
creates the right cycle. I believe that humans
would achieve anything that we are deter-
mined to achieve, if we work hard. So, cel-
ebrate your gifts but you can only be proud
of your choices. And, cleverness is gift. You
cannot become Einstein no matter how
much you work. You have to really decide on
how you're going to make choices in your
life. You get to decide to be a good husband
and a good father.
Would you look to adopt an inventory model
or stick to a marketplace if the e-commerce
sector opens up to FDI in India?
First of all, if I take it up a level, every coun-
try we do business in has its own unique
something. So, the fact that India has this
unique thing is completely normal. The US
has its own thing, Japan has its own and so
on. What we are really focused on right now,
which fits into the current regulatory envi-
ronment here in India, is that we are build-
ing infrastructure to support small and
medium businesses.
If the FDI rules were to change, then we
would certainly be able to help small manu-
facturers too. So, there is an opportunity for
the Made-in-India idea and some changes to
the regulation would be very favourable for
that. But we are also very happy to do busi-
ness in the current environment. We just
have to adapt to those rules. Thats our job.
You're visiting while our Prime Minister
is in the US. Did you miss an opportunity?
(laughs) I'm trying to keep the world bal-
anced...
TIMES SPECIAL: BEST SELLER
JEFF BEZOS, AMAZON FOUNDER & CEO, ON HIS PLANS FOR BRINGING HIS EVERYTHING STORE TO INDIA
THE EVERYTHING MAN
1964
Born Jeffrey
Jorgensen in
Albuquerque,
New Mexico
1968
Name changed
to Jeffrey Bezos,
after his
adoption by
Miguel Bezos
1986
Graduates from
Princeton
University with
degrees in
computer
science and
electrical
engineering
2006 2013 2007
Introduces Kindle, the
electronic reader
Launches
Amazon.in
Launches Amazon's first
mobile phone, Kindle Fire
Starts Amazon Web
Services (AWS)
Buys The Washington
Post newspaper
2014
Announces a $2 billion
investment for India
2005
Launches Amazon
Prime
2000
Launches market-
place format
2000
Launches
Blue Origin, a
space flight
research
company
2003
First full year profit
of $35.3 million
1990
Joins Wall
Street
company
D E Shaw
and Co
1994
Incorporates
an early
version of
Amazon,
called Cadabra
1995
Launches the
beta version of
the Amazon
website
1998
Buys
comparison
site
Junglee.com
1997
One click
shopping
launched
1997
Amazon goes
public, raises
$54
million at a
valuation of
$438
million
1998
Amazon goes
beyond books
and adds music
as it expands.
Goes to Europe
(UK and
Germany)
1998-
2000
Amazon
raises over
$ 2
billion
in debt
AMAZON IN INDIA
HAVE BACKBONE; DISAGREE
L
eaders are obligated to respectfully challenge
decisions when they disagree, even when
doing so is uncomfortable or exhausting. Leaders
have conviction and are tenacious. They do not
compromise for the sake of social cohesion. Once
a decision is determined, they commit wholly.
DIVE DEEP
L
eaders operate at
all levels, stay
connected to the
details, and audit
frequently. No task is
beneath them.
CREATE FRUGALITY
W
e try not to spend money on
things that dont matter to
customers. Frugality breeds resource-
fulness, self-sufficiency, and invention.
There are no extra points for head-
count, budget size, or fixed expense.
2013 2014
AMAZONS
PRINCIPLES
11,500
merchants sell
on its
platform
17
million
products
available
2
fulfilment
centres
set up in
Bangalore
and
Mumbai
500,000
sq ft of warehousing
space, with the
addition of
the five new
fulfilment centres
around India
5 more
centres
planned in
Delhi,
Chennai,
Jaipur,
Ahmedabad,
Gurgaon
Source: Bloomberg
THE CEO WHO
LAUGHS
Bezos uses his laugh like a
weapon. Its a message to
underlings that they have
failed their famously
demanding boss. The laugh
is usually followed by a
devastating comment on
their incompetence
SOME SAMPLES
Are you lazy or just
incompetent?
Im sorry, did I take my stupid
pills today?
This document was clearly
written by the B team. Can
someone get me the A team
document? I dont want to waste
my time with the B team
document.
If I hear that idea again, Im
gonna have to kill myself.
Why are you wasting my life?
We need to apply some human
intelligence to this problem.
CUSTOMER LOYALTY
Many ask me Are your customers
loyal to you?' I say Yes, right until
the second someone else offers
them better service. Its our job to
have divine discontent; to look at our
services with a critical eye. And then to
say how can I do it better. It is better for
societies but difficult for companies. Its
great for civilisations if the standards the
customers have keep going up
ON COMPETITION
The most important thing to
observe about commerce in
general e-commerce included
is that these are really, large, market
segments which will have lots of
winners. Its not a winner takes it all
kind of industry. I personally like
industries where there is room for
multiple winners because the odds of
being a winner are better.
THE MOST IMPORTANT
THING ABOUT COMMERCE,
E-COMMERCE INCLUDED, IS THAT
THESE ARE REALLY, LARGE, MARKET
SEGMENTS WHICH WILL HAVE LOTS
OF WINNERS. ITS NOT A WINNER-
TAKES-ALL KIND
OF INDUSTRY
JEFF BEZOS,
50, FOUNDER
& CEO OF
AMAZON
Source: The Everything Store Brad Stone
ON HIS FAMOUS GUFFAW
I've had this laugh since I was a
little kid. When I was a teenager my
brother and sister wouldn't go see a
movie with me, at least not a
comedy. They were too
embarrassed. As far as Amazon
goes, let's put it this way: people
never lose track of me. They know
where I am all the time so I am the
worst stealth person ever.
Is Amazon
today an e-com,
content or tech
company? I
would say all of
the above. The
only thread that
crosses through
all is that we
are a customer
company. Its
true about
Amazon Web
Services;
Amazon
Studios, where
we are making
original content;
it is true of our
retailing
business
MAKING WAPO A
GLOBAL PAPER
The internet has taken something
away from newspapers but it also
creates something which
newspapers had never accessed before;
global distribution at a very low cost. For
example, The Washington Post has always
almost been a local Washington DC
newspaper but it's also the paper of
record for the capital city of the US. So,
one of the things the Post needs to do is
that it cannot only be a great local
newspaper for the capital city of the US
but also be a national and a global
newspaper using the gifts that the
internet brings
Married MacKenzie Tuttle in 1993,
the couple have four children
According to author Toni Morrison,
MacKenzie was one of the best
students Ive ever had in my creative-
writing classes.
Bezos married MacKenzie, a novelist, after
saying he wanted to marry someone
tenacious and resourceful enough to break
him out of a Third World prison.
THE FAMILY MAN
Corbis
Pics: Chethan Shivakumar
THE TIMES OF INDIA, NEWDELHI
MONDAY, SEPTEMBER 29, 2014 22