An Interview with Avnish Bajaj

Avnish Bajaj’s story is the stuff Silicon Valley dreams are made of. An experienced campaigner in the world of information technology, Bajaj teamed up with fellow Harvard graduate Suvir Sujan to found baazee.com in 2000 after spending some years roughing it out as an investment banker in the Technology Group at Goldman Sachs in New York.

Braving the shakeout that followed after the collapse of dot com companies a couple of years later, the pair guided baazee.com to establish itself as the top Indian online auction portal.

The sound business model they had set up and their early successes prompted the world’s largest auction site, eBay, to buy baazee.com for $50 million and retain Bajaj and Sujan as the heads of their Indian business.


Much earlier, you left India to pursue a successful career in the United States – what was the turn of events that led to this?

I grew up in India and studied Computer Science here at the Indian Institute of Technology in Kanpur. I then went to Harvard Business School for my MBA and graduated as a Baker Scholar. I decided to work in the US for a while after that and gain some experience, so I worked with Apple in the Bay Area and then as a management consultant with McKinsey before working at Goldman Sachs as an investment banker in their Technology product group.


And then you left your high-profile job in the United States one fine day to return home and start a business. What was running through your mind?

After a fabulous year and a half with Goldman Sachs, I started to get bored and itched to do something entrepreneurial. At that time, India was a very nascent market and the infrastructure was also less developed – so it was definitely a very challenging decision. It took me about 2 years to adjust back to life here but am now enjoying it both personally and professionally.


Do you think India would be difficult to adjust to today, for a returning NRI?

I do think that the context has changed substantially since I returned to India 6 years ago. Today, I think it is much easier for returning professionals or entrepreneurs – salaries are up, infrastructure is better, leisure and entertainment options have improved, venture capital and private equity is pouring in, GDP growth has been high and stable and , most importantly, a domestic consumer market has become large and meaningful!


There’s been a lot of talk about e-commerce in India after the success of eBay. How much development has really taken place and where do you see this going?

The Indian e-commerce landscape has improved significantly over the last few years. There was a period of time from 2001 to 2002 when the Internet market actually declined since some of the new Internet Service Providers (ISPs) went out of business. Now the market is growing between 70 to 80% every year and people are buying all kinds of things online – including mobile phones, digital cameras, diamonds and such.

I expect that a lot of new and compelling products offerings on the marketplace will drive the business even higher over the next three to five years.


Could you give us an idea as to how brisk eBay India’s business is at the moment?

Being part of a US listed company which does not break out its business by each country, I am not at liberty to share the exact numbers. What I can do, however, is to talk about some fun facts about our business in India which should give you a sense of the scale of success. eBay India has the largest e-commerce market share in the country (between 28 to 35% of e-commerce depending on the data source used)


Where do you see yourself going with eBay India in the future? Are there any expansion plans in India or nearby countries?

eBay is already in most of the important markets in the world and eBay India sees the domestic growth opportunity as large enough to us to continue to focus on the Indian market.

We have 3 important businesses within eBay India – our online marketplaces business which is the best known and also includes our Classifieds business at www.kijiji.in, our B2B Bank to Dealers Auto marketplace which is by far the largest marketplace of used vehicles in this country and Paisapay – our online payments business. In addition, eBay globally also has Skype which has been doing very well.

eBay India is now managed by 2 co–Country Managers for the last 2 years and they are focused on growing all aspects of our business.


Are you happy with the development, if at all, of cyber laws in India?

Laws are for the government to make and for the citizens to follow! So, really, whether I am happy or not is irrelevant. On a more serious note though, I think the IT Act 2000 is a great law – the issues always arise when there are ambiguities that can result in misinterpretation or potentially, even abuse. I understand that the government is looking to revise the law to make it clearer and remove ambiguities – which is their prerogative.


What are the issues eBay India is grappling with today?

A lot of the hurdles to our business were related to the absolute size of the market for the first 2-3 years of our lifecycle. These were related to the number of Internet users, shipping and payment infrastructure, trust issues, education etc. Now most of these have been taken care of and I would say that our main job is to educate users on the power of our platform in order to drive up adoption rates further.


Would you agree with the argument that the Indian “IT Revolution” is for the most part based on cheaper and more efficient processing of copious amounts of data, as opposed to real innovation in IT?

While generalizations are always dangerous, I would tend to agree with most of the above statement. However, every opportunity is leveraged in a certain fashion for a reason. In this case, the main reason for Indian IT companies being focused on outsourced services rather than local product development has been due to the fact that the domestic IT market has been too small from both an enterprise and consumer spending standpoint.


Do you see any change with this scenario?

This scenario is changing on the enterprise front as Indian companies start investing more in IT to drive up productivity and as the marketplace regulates itself on the piracy front from the consumer standpoint. I think in the next three to five years you will start seeing higher value added by Indian IT product companies.