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When e-commerce companies build scale, cost comes down. Companies that can handle scale and reduce costs over time will win. Margins will come from reducing costs over time and not by increasing prices. Technology is the answer at large scale.
Valuation depends on several factors. From an investor angle, they look at leadership position, management, and what the company's offerings are. I think these three things got 5/5 for a company like Flipkart, and that is what is driving valuations and growth.
At Amazon, we were not working with the e-commerce division but with the Web services team. We started Flipkart completely from scrap. Moreover, the whole shopping behaviour and infrastructure challenges in the Indian market were different from that in the U.S. and European markets.
The first thing I look at is, 'Is the entrepreneur going after really big problems, to the extent that it feels scary when they talk about it?' You wonder if the idea is possible. I have seen that a lot of times, people go after small problems, and that's a sign that they are not confident.