Amazon Invests $295 Mn In India Operations; Ups Ante Against Flipkart, Snapdeal

In a bid to gain an edge over competitors, ecommerce giant Amazon has invested a fresh capital of $295 Mn (INR 2,010 Cr) in its main Indian unit, making it the single-largest capital infusion so far, as per a report by ET.

The investment was made in November and marks the total capital invested in Amazon Seller Services to over $1 Bn (INR 7,000 Cr) in the last 12 months, according to regulatory filings.

“It is losing about INR 600 crore every month (non-sale months),” stated one of the sources, close to the development. As per the same source, Amazon will lose nearly $1 Bn this year in India as it races to outpace its Indian rivals, including homegrown unicorns Flipkart and Snapdeal.

This will further add to the worries of ecommerce leader Flipkart, whose co-founder Sachin Bansal has been crying nationalism and trying to make the Indian government follow the Chinese way in designing policies which will favour homegrown companies and help them battle with foreign, more established players, such as Amazon.

“In an industry (that is) reportedly flat or negative, Amazon India has continued to show remarkable growth of over 100% this year. We will invest what it takes to become the customers’ preferred choice in India, and are encouraged that we are India’s largest and fastest-growing ecommerce marketplace,” said an Amazon India spokeswoman, in an official statement.

Amazon has launched a slew of initiatives this year with an aim to capitalise upon its market share. In June 2016, Amazon announced that it would infuse $3 Bn in India in the next few years to take on its rivals. In July, it launched its biggest Fulfillment Centre in Sonipat near New Delhi.

Earlier in September, Amazon infused $17 Mn in its Indian wholesale arm to  increase the transaction of smartphones via its B2B portal, in compliance with the revised FDI norms. Earlier this month, it also unveiled its Launchpad programme in India. The move is aimed at helping Indian startups to increase their customer base globally. Following that, reports surfaced that it invested $12 Mn in its Indian wholesale vertical, Amazon Business.

Earlier last week, it also announced the launch of its Prime Video service in India. Prime Video is an additional offering for Amazon’s Prime subscribers, including existing ones and allows users exclusive access to movies, Amazon’s original series as well as premium content from across the globe.