In South India, Amazon builds its largest office yet

Hyderabad, India

THE austere building is hardly distinguishable in the landscape of glass and concrete buildings making up Asia's Silicon Valley, as Hyderabad is known. It is Amazon's largest office building in the world.

With plans to cement its place as the centre of gravity around which online retail revolves, Amazon has turned to India, the world's fastest-growing market for Internet users. And it has picked Hyderabad, a city of nearly 10 million people in India's south, as its base of operations there.

But the project faces challenges, including pushback from local businesses and politicians.

Hyderabad has emerged in a few short years as a technology and financial centre. The city, which saw the biggest surge in tech office space last year, is already a base in India for other multinational tech companies such as Facebook, Google, Microsoft and Apple, which spent US$25 million for the development of its offices there.

"Hyderabad is a known software tech talent centre, and the government has been an enabler for us to have a campus this size," said Minari Shah, an Amazon spokesperson. "This is an important confirmation of how India continues to be important to Amazon."

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Over the past decade, the technology behemoth has woven itself into the fabric of Indian life. And now, four years after construction began, the Hyderabad office - Amazon's first fully owned office outside the US - joins 40 other offices, 67 shipping centres, 1,400 delivery stations and a workforce of more than 60,000 (plus 155,000 contractors) in the country.

The record size of the building - 1.8 million square feet - and the total campus area are equal to nearly 65 football fields.

When Amazon founder Jeff Bezos visited India in January, he was met with an antitrust case by Indian regulators, who are investigating Amazon and Indian e-commerce giant Flipkart, which is owned largely by Walmart.

India bans foreign direct investment in retail, a shift from policy in the US and Britain. By law, Amazon and other foreign-owned e-commerce firms are required to be neutral marketplaces reliant on independent sellers.

But Praveen Khandelwal, founder and general secretary of the Confederation of All India Traders, which oversees 70 million traders and 40,000 trade associations, argues that the firm has hurt domestic trade, resulting in the closure of thousands of homegrown businesses across the country.

Amazon's new Hyderabad office, he said, is merely a way to "push for control and dominance over Indian retail trade in a more structured way." He led protests against Amazon's trade practices this year.

India's retail regulator is investigating Amazon over allegations that it is using deep discounts and preferred sellers, said Satish Meena, a senior analyst for global technology research firm Forrester. "There are loopholes they are exploiting. Everyone knows that," he said.

The challenges emerging in India echo stories in the US, where American tech giants have squeezed smaller rivals and business owners.

Amazon is facing anti-trust charges in the European Union, and Mr Bezos and other tech titans were grilled by US lawmakers in July about their anti-competitive practices.

Amazon's 15-storey Hyderabad office opened last year. It features prayer rooms, a small synthetic cricket pitch, 49 elevators, a helipad, and a cafeteria open 24 hours a day on a campus that, according to the company, is made of 2.5 times more steel than the Eiffel Tower.

It is home to 7,000 employees out of an expected workforce of 15,000, largely comprising technology teams focused on using machine learning and software development to innovate services - such as Amazon Pay's cash load service for digital transactions in a country with 190 million citizens who do not use banks - as well as customer service workers.

Representatives for Amazon declined to comment on the cost of the development but revealed to Bloomberg that it cost "hundreds of millions of dollars" to build.

The campus is Amazon's largest, but the company plans to open a second headquarters in Arlington, Virginia, which could be as large as 8 million square feet.

Amazon and Flipkart bill themselves as e-commerce marketplaces, matching buyers with independent sellers. That has enabled Amazon to sell products by sellers such as Cloudtail, at prices lower than independent sellers.

The effect of Amazon's strategy has been noted. For the past couple of years, Satinder Wadhwa has struggled to keep his business alive in Greater Kailash, South Delhi, amid the growth of online retail. Now, he estimates he gets half as many customers.

"People have stopped coming to the market. That means they are buying online," he said. "If they are getting a better price and delivery at home, why will they come to us?" NYTIMES