Amazon invests Rs1,680 crore more in its India unit
The Rs1,680 crore investment is part of Jeff Bezos’s commitment to invest $5 billion in India, where it’s competing with Flipkart to dominate the e-commerce market
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Bengaluru: Amazon, the world’s biggest online retailer, has invested another Rs1,680 crore in its Indian unit as part of its commitment to invest $5 billion to expand its local business, which is locked in a battle with arch-rival Flipkart to dominate what is seen as the world’s last major unconquered Internet market.
Amazon Seller Services Pvt. Ltd (Amazon India) received the funds last month, according to regulatory documents filed with the ministry of corporate affairs.
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In June 2016, Amazon.com Inc. had said it would invest an additional $3 billion in India after the company exhausted its earlier investment pledge of $2 billion made in 2014.
Since Amazon chief executive Jeff Bezos made that initial $2 billion investment commitment in July 2014, Amazon India has already received more than Rs15,000 crore ($2.31 billion).
Amazon has been spending all that cash on building massive warehouses, a large logistics unit, marketing, discounts and increasing product assortment.
The firm boasts of the largest product assortment, the most expansive supply chain and the largest seller base among e-commerce firms in India.
Mint reported last April that Amazon India, which was launched in June 2013, had doubled its authorized capital to roughly about Rs16,000 crore. Since then, Amazon has invested twice in its Indian marketplace—a Rs2,010 crore infusion in December last year and the latest in June.
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Its authorized capital was just Rs1,500 crore in July 2014, when Bezos made the $2-billion commitment. Amazon’s aggressive investment in its India business is matched by Flipkart’s own capital-raising prowess. In April, Flipkart raised as much as $1.4 billion in fresh capital from new strategic investors comprising China’s Tencent Holdings, eBay and Microsoft. Flipkart, which has raised more than $4.6 billion since starting out in 2007, is preparing to buy out smaller rival Snapdeal as part of a proposed deal aimed to get further investments from Snapdeal’s largest investor SoftBank.
“We remain committed to our India business with a long-term perspective to make e-commerce a habit for Indian customers and to invest in the necessary technology and infrastructure to grow the entire ecosystem,” said an Amazon India spokeswoman.
Amazon’s massive investment has yielded immediate results for the American e-commerce giant.
Though Flipkart continues to be the overall market leader, including sales from its Myntra and Jabong units, Amazon India is catching up fast.
Amazon is desperate to conquer the Indian Internet market, after losing out to Alibaba.com in China.