Amazon ACE Challenge 2018 – Consumer Business Case Breaker

Instructions
• Please use Calibri Font, size 10 for the answer document.
• Please write your answers in one document. Appendix and excel answers are to be separate.
• Your solution should not exceed 4 pages in all, refer to the expectations of each question inline. Appendix can
be extra for only providing data supporting your recommendations/solutions. Recommendations given in the
appendix will not be considered for evaluation.
• Your solution will be evaluated on 2 broad parameters- Structure & Innovative idea.
• Original ideas would be preferred over suggesting existing Amazon programs/features available or
implemented globally.
• Provide the source for every data point provided in the solution.
• Clearly state any assumptions you make while giving recommendations/solutions.
• Financial model should be an attachment in the form of excel sheet combined along with the 4 pager solution
and upload as one zip folder
• In case you have any particular question related to India Consumer Business Case, please mail your questions
to ace2018cb@amazon.com

Introduction
Amazon launched in India on 5 June, 2013 with a vision to transform the way India buys and sells. Amazon.in seeks
to build the most customer-centric online destination for customers to find and discover virtually anything they want
to buy online by giving them more of what they want – vast selection, competitive prices, fast and reliable delivery,
and a trusted and convenient experience; and provide sellers with a world-class e-commerce marketplace. Amazon
is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment
to operational excellence, and long-term thinking.

Over the last 5 years, Amazon India has continously strived towards creating the best experience for its customers.
They benefit from a safe and secure ordering experience, convenient electronic payments, Cash on Delivery,
Amazon’s 24x7 customer service support, and a globally recognized and comprehensive 100% purchase protection
provided by Amazon’s A-to-Z Guarantee. Amazon India continues to offer a fulfillment infrastructure in the country,
enabling tens of thousands of small & medium businesses.

1-Click shopping, product recommendations based on customer reviews and your interests, Prime services like Prime
Video & Prime Music, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon
Echo, and Alexa3 are some of the products and services pioneered by various Amazon entities. [Read more about
Amazon]

Problem Statement
You are the Advisor to Amit Aggarwal, Amazon's India Country Head and Senior Vice President. You have identified

AMAZON CONFIDENTIAL 1

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption
certain product categories where you believe there is the highest potential for growth for Amazon India – Fine
Jewelry, Furniture and Automobile Tyres. Your task is to pick a category and make a six month plan to ensure that it
sets the foundation to grow to be a $1 billion category in 3 years.

Consideration set

Tyres - Amazon launched Tyres in 2016, with selection in both car & bikes.

According to Automotive Tyre Manufacturers’ Association (ATMA), Tyre industry volumes are expected to grow at
7-8 per cent at about 1,805 lakh tyres during FY2018. It is also one of the very few categories in automotive industry
where replacement market is more than the OEM sales. By value, replacement market accounts for approximately
60% of the Industry with Institutional / OEM and Exports making up to 22% and 18% respectively. Tyres are
consumables products with a specified lifecycle (need replacement every 30,000 Kms).

Apart from a number of online tyre selling companies, tyre majors such as Apollo Tyres and Michelin India too are
promoting sale of tyres through their own online portals. While selection, pricing & offer depth are necessary they
are not sufficient factors to guarantee growth due to the technical & non-DIY nature of the category. Apart from
conventional challenge of offering wide product ranges at competitive prices, arranging strategically located fitment
centers and logistics becomes a customer need. Hence the challenge to grow category of tyres online require end-
to-end solution.

Fine Jewelry -

Sales of Fine Jewelry in India are world’s third largest ($55BN), next only to China and US and growing at 15% CAGR.
Traditionally, local/ family jewelers have dominated this category, but there has been significant change in the
structure in the last decade with over 25% market is in the organized segment now (vs. less than 10% a decade back).
Large jewelry retailers are setting up showrooms across India and customers are becoming more conscious about
product quality.

However, the online penetration in this category in India has stayed minimal (less than 0.5%). If we evaluate similar
sized markets, the penetration is much higher (US: 12%+, China: 4%+). While multiple jewelry focused platforms
have come up and marketplaces are also focusing on this segment. However, the category remains largely untapped.
While online platforms offer wider selection, similar/ better pricing, flexible return promises but they are not
sufficient factors to drive wallet share to online due to the nature of the category a) relatively higher ASP (average
seller price), b) trust driven category were customers prefer to purchase jewelry from their family jewelry, c)
consultative purchase process with sales executives typically advising customers on trends, metal and diamond
details. Customers find personal touch and guidance missing when they explore and browse the jewelry products
online, d) customers want to touch/ feel/ try the product before making the purchase. Now, even if India’s online
jewelry penetration reaches ~2% in next few years, it opens up over $ 1BN+ market which currently has limited
competition. The first needle mover player in this space with right processes and mechanisms will capture a lion
share of the market.

Furniture

Furniture category was launched on Amazon India marketplace in late 2015. Customers spend ~45 days since they
start their purchase planning to actual purchase. The key drivers for a purchase are replacing old furniture and
moving to a new home. Key parameters which customers consider while making their buying decision are around
product specification, durability, warranty/guarantee, installation and price.

AMAZON CONFIDENTIAL 2

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption
Customers are skeptical of buying a premium product such as pure leather sofa online. It is only if they find all
relevant details about the product like close up images, dimensions, videos, etc. would they get convinced about the
look & texture of the product. Since it is a high cost purchase which also has a deep need of touch and feel customers
have a lot of questions around what happens if the product comes damaged, assurance that the product quality
would be good. Customers expect Amazon to take care of their end to end experience from delivery to installation
to returns in case something goes wrong. Apart from ensuring an immersive buying experience it is imperative to
provide seamless post purchase experience such as installation, repairs & easy replacement/returns.
With an unorganized and fragmented furniture category, India offers immense opportunities to organized players.
The demand for furniture is growing in the country on account of increasing purchasing power of the consumers,
changing lifestyle, increasing urbanization and widespread availability in tier II and III cities. According to a recently
published report by TechSci Research, “India Furniture Market Forecast and Opportunities, 2019”, the country’s
furniture sales are projected to cross USD32 billion by 2019.

Things to think about

In order to attain the next $1 billion business efficiently, you will need a better understanding of each category and
how customers interact with them. The solution may not be just the largest category by sales, since the effort to
move a customer from offline to online and retain them differs in each. Each category has a unique set of problems
to solve - while furniture may require a better understanding of how the product looks in an overall setting, for
jewelry this may require a more personalized visual appeal. While tyres are more standardized, the category is not
highly DIY friendly. Due to this, you will have to consider the following to build a scalable and efficient model:

• Size of the category, common issues and how easily category can be penetrated
• Understand the customers, their expectations and decision making factors for each category
• Provide an experience that delights the customer, and differentiates Amazon's offering in the online and
offline space
• Growth plan could span across (not limited to) marketing, product initiatives, selection expansion, pricing.
• Please note that long-term sustainability and scalability of your strategies will be an added advantage.

You have been given permission to deploy all departments of Amazon as required to grow the business, including
existing channels and any new systems that have to be built.

Questions

• Pick one of the proposed 3 categories – explain why you chose the category and who your customer is?
• Briefly cover the big problems identified for your chosen category in acquiring and retaining customers
• Given constraints of resources and timeline, how will you address the top 3 problems?
• Detail the capabilities to be built and a 6 month execution plan, which will drive growth to $1 Billion in
3 years

AMAZON CONFIDENTIAL 3

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption