When you look at India, what are the opportunities that most excite you?
India is the one of the most important and largest businesses in all of Amazon. We just announced that we’re going to invest another $48 billion by 2030. We have already invested $40 billion since 2010-it’s a very significant area of investment for us. In our stores business, we have a large business. We have over 100 million customers. But still, if you look at the worldwide retail market segment share, it’s still about 85% of it on premises or physical stores as opposed to online. That equation will flip over time. One of the things that’s starting to change that composition is how fast items are delivered. We have the broadest selection of products. You look at quick commerce today where we can deliver thousands of items in minutes. We can deliver tens of thousands of items in a few hours. We can deliver a million items the same day. Four million items the next day and many millions more. It’s just a part of Prime membership. When you can get everything that you can imagine wanting and you can get it quickly, like we’re able to provide it, it’s compelling.
While most of the retail segment share is in physical stores, I expect that will change over time. If you look at the growth of cloud too, we have a large cloud business in India. It’s another one of those market segments where the global IT spends today; about 85% of it lives on-premises. If you believe most of that will move to the cloud, which we think will happen in 10-20 years, we have a significant opportunity in India. We have regions, which are areas that have multiple data centres in Mumbai and Hyderabad. It’s early for us in India. We have a significant business, but we have a lot more work to do.
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India is in some ways unique for Amazon in that the regulations here compel you to operate a marketplace model instead of having inventory on your own. Would you say, had that been different, the opportunity for Amazon in India and your growth prospects could be a lot greater?
I don’t know if I would say that. In every country in which we operate, we are operating according to the rules of the land. We’re comfortable here in India. One of the advantages for us is we have a large number of third-party selling partners. We have 1.7 million Indian selling partners here who do all the selling. We have a close relationship. It’s mutually beneficial. We’ve been able to help them build meaningful businesses. Together, we’re able to provide great selection experiences for our customers. We have a significant commitment to small and medium-sized businesses in the country. We’ve helped digitise 12 million small and medium-sized enterprises here. We’ve created nearly 3 million direct and indirect jobs. We’ve helped our third-party sellers here export over $20 billion around the world. The model has been conducive to us building a tight partnership with sellers, and it’s been good for customers.India and the US are closely engaged in talks for a free trade agreement. Relaxing restrictions on FDI in retail… are those part of the discussions?
The prime minister and the president probably know best what’s part of those discussions or not. We’re comfortable operating under the rules of the land today. Should they change, we would figure out how to adjust. If they don’t, that’s okay too.
Is listing of the Indian unit something that you would consider?
We don’t have a plan to do something like that from a broad view, but you never know when the world changes.
Amazon has about 40 times the revenue of SpaceX. In terms of market capitalisation, somehow, the markets have valued SpaceX broadly in the same range as Amazon. How do you look at this gap?
I’ve given up trying to make sense of what happens in the market in a short period of time. There are people who are noteworthy who say in short term the stock market is a voting machine and in long term it’s a weighing machine. That has been my experience in the 29 years of being at Amazon, which is in any short period of time you can see momentum. You can see different spikes up and down. But over long term, it’s what you deliver for customers. It’s the experiences you provide. It’s the business you build around it that matters. I expect that to be the case too here.
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Could you say what part of your incremental investments coming into India will go into retail and what part of it will go into cloud and data centres?
Much of the new incremental investment is for our cloud business and for the growth in AI. We’ll have about $21 billion of investment in cloud and AI in the country. It’s significant, but still the largest amount for us is in our retail business.
Rival firms are burning a lot of cash, especially in quick commerce. Are your teams adequately capitalised to be competitive?
Yes, we’re investing quite a bit in India. As I was mentioning earlier, there’s no other retailer that has the broadest selection of products that’s able to get to people in as short a time as we can…the thousands in minutes, the tens of thousands in hours, the million the same day, and the four million plus next day. That combination is unusual. We’re excited about growth in our quick-commerce capabilities. We launched a year ago, and what we’re finding now is that our unit sales is doubling every quarter. For our Prime members who use quick commerce, they’re buying three times as frequently as they were before they were using quick commerce. We’re expanding quick commerce into 300-plus cities in India.
In quick commerce, is it fair to say that the local incumbents got quite a head start before Amazon got into it? Is that by design? Was that a missed opportunity?
There are different companies that get into different customer experiences at different times. There were some people who started earlier in quick commerce, but we have grown. We reacted quickly. We experimented with our own solution for customers, which our customers have enjoyed. Our quick commerce offering has grown rapidly; the combination of our broader selection, our quick commerce capabilities, and our Prime programme… where it’s unusual. The number of people in Prime in India has the largest number of new customers that are entering the programme. We expect to double the number of Prime customers at end of this year relative to 2023.
In terms of acquisitions, would Amazon-on the quick commerce side-be looking at inorganic growth via acquisitions? On the AI side, would you think of participating in India’s sovereign AI play by, say, investing in a Sarvam or an Emergent Labs or one of these companies?
We like other companies, we’re looking at companies we think have tech and customer experiences and talent that would be great for our customers, great in combination with our company. We’ve been fortunate enough to acquire companies that have made an impact in our business in India. We’ll continue to look at that actively. We work closely with the government on their AI capabilities. We have 8,500 GPUs we launched for startups in startup community in conjunction with government here. We’ve trained 10 million people on cloud and AI. However, we can help people in the country be successful in learning the tech, being able to employ the tech, being able to start businesses, and where we can combine efforts with government, we will.
You stepped into large shoes-that of Amazon founder Jeff Bezos. His visits to India used to be these celebratory events and he would make these big-bang announcements. There is a perception that you are a more disciplined chief executive in terms of how the company spends cash. Should we expect the same generous spending and commitments to India? Or a more restrictive approach?
I’ve been at Amazon for over 29 years, so I’ve been involved in the company from the start. Some of those characterisations can be exaggerated. The company always was frugal and was cost-conscious and invested in benefit. I would say the same is true today. We remain frugal and scrappy, but we are making a substantial amount of investments. If you look at what we’re investing, if you look at AI investments, when we talked about how we’re going to spend $200 billion in capital expense this year, it’s aggressive.
So if you look at investments in AI, you look at investment in ecommerce, in stores, in our last-mile transportation network.
If you look at investment in AWS, in data centres. If you look at investments in lower form of satellite constellation. If you look at investments we’re making in healthcare, in autonomous driving and ride-hailing-it’s broad. You later on say that we have always invested aggressively in India and continue to do so and will continue to do so. It’s, I think, similar to how we behaved over the 29 years that we were at Amazon.