A wake up call for Indian retail?

User Rating: 0 / 5

Star InactiveStar InactiveStar InactiveStar InactiveStar Inactive

As retailers in India wait with baited breath for Amazon to start functioning fully in the market — depending on the decision taken by the Government to open up e-commerce to FDI — The everything store: Jeff Bezos and the age of Amazon by Brad Stone, might just provide them hints (and sleepless nights!) to how Amazon, the pioneering behemoth of e-commerce in the developed world, will behave here once the gates are finally lifted. Will Amazon be the big bully and ride roughshod over competition while it threatens brick-and-mortar with superlative service, millions of SKUs and a direct customer connect? Will established suppliers tremble in fear? Or will Amazon just not be able to read our rather different market, quite like the other retailer that evokes similar feelings, Walmart, and falter? The picture, going by the book, might not be so easy to paint. But one thing is clear: it's not going to be business as usual, for anyone.

Veteran journalist Brad Stone gives an innocuous enough start to the book, tracing the early days of Amazon, right from the birth of the idea in the mind of its founder, Jeff Bezos, a Harvard graduate working in a New York hedge fund. Stone shares trivia about how Amazon got its name: the original name was Cadabra, which was dropped as it sounded like 'Cadaver' when answering the phone. Bezos then chose the name Amazon to signify a connect between the largest river and the largest book store.

In addition, the book discusses in vivid detail how Bezos first set up shop in his home's garage and practised frugality by getting tables made by an employee with carpentry skills. He refused to subsidize bus passes for his staff so  they didn't leave at a set time, working for less time in the process. He did a lot of interesting things during the period: he used the publisher's inventory instead of maintaining his own by ordering from them; he put up reader reviews — critical in helping users buy the right books. The latter helped bring a degree of personalisation, which later became one of the strong points of the site. He also offered free delivery of books. During that period, Amazon also developed a bit of corporate mythology: 'Jeffisms', actions and things said by Bezos, which became a cornerstone for comment and 'Nutters' (stories of tantrums thrown by Bezos in anger in which he humiliated employees. Some of the trivia doing the rounds was based on incidents lodged in the past: When Ravi Suria, a junior analyst from Lehman, questioned Amazon's fundamentals, he got Bezos' hackles raised (and the shares to drop in value). Naturally, Bezos reacted by taking on Ravi personally and quite publicly. He even invented a word for the analyst, 'milliravi'!

In a manner, the initial days do reflect the chaos that any startup is afflicted by: Mackenzie, Bezos' wife had to give a personal check to clear a debt; everyone packed books including Bezos. He used to even cart the packed books to the courier company in his car.

But quite clearly, from the beginning, Amazon had a DNA, built in primarily because of Bezos and his almost messianic zeal to setup not just a book store but a 'store that gives the consumer everything'.Meetings started (and still do), not with Power Point presentations, but with a quiet reading of a six-page summary note highlighting the main areas of discussion by the initiator – which allows for informed discussion and more important, thinking. (Bezos feels Power Point makes a manager lazy).

So the intent, very early in Amazon's lifecycle, was: work towards replacing the way things are done. And Bezos makes no bones about it:  he tells the book publishing audience 'Amazon isn't happening to books, the future is happening to books.’

It is in Amazon's relationship with others (brick-and-mortar bookshops, the publishing world, potential acquisitions and even suppliers) that a side of Bezos is revealed that makes one question if not his motive, his methods. For instance, Bezos was partnering with publishers to get books from them. He was persuading them to digitise their collections so that he could use them on the Kindle reader, which was a new product Amazon was launching. While announcing the product at a press conference, Bezos went ahead and also announced ridiculously low price for these digitised books, without letting the publishers know, in effect pulling the rug from under their feet! He is also notorious for relentlessly undercutting prices of products (the book mentions the example of an expensive handmade German knife range), even after being categorically asked not to by the brands, just to bring in customers.  And he even traps acquisitions in e-commerce by ensuring that their value is disturbed if they talk to others. For Bezos it's all business.

The book raises many questions: can Amazon, the company, be separated from Bezos, the owner/CEO? Is the bullying and near-underhand pressure on competition something that Amazon can live with in the future – or is it a signature for new economy businesses (a la Steve Jobs and Mark Zuckerberg)? And does this image of Amazon and method of working disturb Bezos?

While it has an impact, and Stone also talks about Amazon.love, a note by Bezos to list areas that make companies 'friendly' (interestingly the list, by typical Bezoslogic, includes ideas such as 'defeating tiny guys is not cool') as well as a list of companies that are perceived as consumer unfriendly. Probably the intent to do good (or in this case, seen as good) is there, but then he seems to wander off when he says that this needs a thorough analysis by 'a thoughtful VP' – who by implication was someone other than him.

As you finish reading the book, it leaves you with mixed feelings on the company and also the man behind it. Amazon does come across as a bully, albeit a successful one: it shipped US$ 846 worth of products in the first week and clocked almost US$ 74 Billion in sales by 2013. But it's the genius of the founder, Jeff Bezos (who is now looking at outer space as the next frontier) that comes through in every action taken. Can Amazon survive him – in every sense of the phrase?

Reviewed by Sanjay Badhe, renowned marketing and retail strategy expert with Indian as well as international experience, consulting with some of the reputed names in retail as well as start-ups.

Contact Us

Retailers Association of India (RAI)
111/112, Ascot Centre, Near Hotel ITC Maratha, Sahar Road, Sahar,
Andheri (E), Mumbai - 400099.
Tel : +91 22 28269527 - 29
Fax : +91 22 28269536,
Email: info@rai.net.in
CIN: U91990MH2005GAP151959

About Us

Retailers Association of India (RAI) is the unified voice of retailers in India. A not for profit organization, RAI works with all  stakeholders for creating the right environment for the growth of modern retail industry in India.  Read More.

Follow Us
News, Analysis, Insights, Jobs, Delivered to your inbox.