India could be a global model for digital payments in the future, the head of Amazon India, one of the country’s largest online retailers said on Thursday.
Amit Agarwal, Vice President and Country Head, Amazon India said there was structural innovation taking place in the country with an ‘India First’ movement in digitisation of payments.
Agarwal was part of a panel discussion on Indian e-commerce organised by Founding Fuel, a media and learning platform for entrepreneurs, in association with BOOM.
India’s demonetisation drive launched in November last year has been a mixed bag for e-commerce companies, hurting sales in the initial few weeks but sparking serious interest in the fin-tech sector.
With 86 percent of the currency being redundant overnight, demonetisation has also been a catalyst for innovation in the digital payments space.
The government, in its effort to wean Indians off cash, has launched a slew of digital payment options such as Aadhar Pay, BHIM, UPI, Bharat QR among others in recent months.
Agarwal said few countries would be able to adopt rapid experiments such as Aadhar-based payments, as quickly as India had.
“India might be a reference example for how digital payments could happen in the future.”
Agarwal also said that India was constantly challenging the company’s ability to invent.
“Every innovation that we’ve made with a local entrepreneur; (in India) we have found a way to use somewhere else.”
Amazon.com Inc, the world’s largest online retailer, has been in India since June 2013 taking on home grown e-commerce start-ups such as Flipkart and Snapdeal, with its deep pockets and aggressive strategy.
The Jeff Bezos-led company has pumped in more than $2 billion in India and has promised to invest $3 billion more.
Agarwal, an alumnus of Indian Institute of Kanpur and Stanford University, said the average Indian consumer was now willing to pay a little extra for value-add services.
“People, when they join Prime free trial, their shopping patterns increased 400 percent and once they pay for Prime that goes up 200 percent after the free trial,” Agarwal said speaking about the company’s Amazon Prime service.
Amazon India received 80 percent of its traffic through mobile, according to Agarwal.
E-commerce sales in India were about 14.5 billion in 2016.
Although the country remains one of the fastest growing e-commerce markets in the world, Indian e-commerce is still reeling from global political headwinds of 2016 and demonetisation.
Large scale layoffs, high-profile management exits and cuts in valuation have spilled over into 2017.