Amazon pumps Rs1,680 cr into Indian unit, crosses $2-bn mark
06 Jul 2017
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 business in a country where it is locked in a battle with arch-rival Flipkart to dominate the fast-growing online marketplace.
Amazon Seller Services Pvt. Ltd (Amazon India) received the funds last month, according to regulatory documents filed with the ministry of corporate affairs. With this, Seattle-based Amazon has crossed the $2 billion mark in India investments, taking its total capital invested to over Rs13,800 crore ($2.1billion).
The fresh capital infusion made last month will make it the second largest global investor in India's digital economy, after Japanese internet major SoftBank which has invested close to $4 billion already, but ahead of Flipkart backer Tiger Global which has parked less than $2 billion here.
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.
Amazon's founder and chief executive Jeff Bezos recently reiterated the commitment to India after meeting Prime Minister Narendra Modi in US last month, tweeting ''Always impressed, energised by optimism and invention in India. Excited to keep investing and growing.''
Since Bezos made an 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 the 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.
A year after launching its subscription-based Prime programme in India, Amazon is focused on growing the selection and offerings under Prime, to increase membership and stickiness as renewals for the programme will be at full price of Rs999 this year.
Part of the infusion could also be towards strengthening the network ahead of the festive season, the biggest sale event online, which arrives earlier this year in September.
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 - Rs2,010 crore infusion in December last year and the latest in June.
''We remain committed to our India business with a long-term perspective to make ecommerce a habit for Indian customers and to invest in the necessary technology and infrastructure to grow the entire ecosystem,'' said an Amazon India spokeswoman.
Though Flipkart continues to be the overall Indian market leader, including sales from its Myntra and Jabong units, Amazon India is catching up fast.
