Why Amazon’s India business head pulled the plug on IPL

Manish Tewari said those billions would be better spent on Amazon’s e-commerce business.

Manish Tewari was just months into his new job as the head of Amazon.com Inc’s India business when he faced a colossal decision: how aggressive the US e-commerce giant should be for the Indian Premier League’s media rights. Should I bid?

Securing the digital streaming rights for the cricket tournament would be a huge coup, potentially drawing millions of viewers to Amazon. But Tiwari and his allies will have to bid against deep-pocketed giants like Reliance Industries Ltd. In a surprise move, Amazon pulled the plug before the auction began. Ti and senior management in Seattle decided that those billions would be better spent on Amazon’s e-commerce business.

“The final call was based on cost numbers,” Tiwari said in his first interview since taking over as country head, on the 27th floor of Amazon’s India headquarters in the northwestern neighborhood of Yesvantpur, Bangalore.

It signals tough calls for the 52-year-old former Unilever Plc executive, who took over his current role in February. A country of nearly 1.4 billion people may be Amazon’s most promising long-term opportunity, but it is also extremely challenging, with tough local rivals, a rigid government and unusually price-sensitive consumers.

Amazon first began targeting India under founder Jeff Bezos, who regularly visited the country and mingled with Prime Minister Narendra Modi. The company has invested more than $6.5 billion in India, hired 110,000 employees and built 60 warehouses to expand its reach in the country.

Tewari anticipates that the next phase of growth will be moving from India’s large cities to less affluent, non-English speaking people in rural areas known as India. He expects to add the next 100 million buyers to this effort.

Tiwari said, ‘I want Amazon to grow with India. “India is projected to be the fastest growing major economy in the world.”

India’s e-commerce market is projected to grow to $350 billion by 2030, growing at a nearly 23% clip as millions of first-time smartphone users access the Internet. This is competition designed for a swarm of startups along with Walmart Inc’s Flipkart from giants like Reliance. Tewari says that many rivals have room to succeed, given that only a small percentage of the country’s $1 trillion retail market has gone online.

“At less than 3% online retail penetration, the last thing I would worry about is competition,” he said. “Both sellers and shoppers are starting to see value in online retail.”

Their strategy to grow beyond the big cities of India is a combination of technology and marketing. Its focus will be what Tewari calls “smart commerce”, an initiative announced last month to help small traders go online. The company has so far managed to enroll around one million sellers, but this is only a fraction of the total.

Tiwari, who has worked from Thailand and Vietnam to India and Dubai during his two decades at Unilever, said, “If 13 million or more small businesses are digitized, online shopping can reach every corner of India. “

He also thinks it’s important to let more shoppers tap Amazon by voice, including in local languages. So the company’s engineers are enhancing the app features to enable such purchases. It’s also expanding to buy-now-pay-later, an increasingly popular way of offering customers credit without the need for a credit or debit card.

His marketing strategy couldn’t have been different from that of the giant conglomerate Reliance, led by billionaire Mukesh Ambani. A joint venture backed by Reliance won the rights to show Indian Premier League cricket matches online for 238 billion rupees ($3.05 billion).

Tiwary is shifting Amazon’s focus on developing local influencers to help market it to customers in India. These are not stars like Kim Kardashian or Addison Rae. Instead, they are students like Kajal Srivastava from Deoghar in Jharkhand state or Ahmed Zahid from Kashmir, who unbox and display products like cheap sports shoes, memory foam pillows or the latest instant curry concoctions.

“It’s very different from the TikTok influencers you see elsewhere in the world,” Tiwari said. “It is small now but looks extremely promising. It is a new playbook for social commerce.

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