Amazon is planning to infuse another $62.7 Mn (INR 400 Cr) in its Indian logistics arm Amazon Transportation Service, ATS.
As per an ET report, “ATS has now increased its authorised equity share capital by INR 400 Cr, according to filings made by the company with the Registrar of Companies. The decision was taken at a meeting last month.”
Amazon Plans To Extend Services Of Indian Logistics Arm ATS
Recently, the company announced its plans to extend its logistics services to its sellers in India, even for orders placed through offline distribution as well as competitors Flipkart and Snapdeal. It has recently launched a pilot programme for the same, where it is reportedly working with 300 registered sellers.
Earlier, Amazon Web Services (AWS) was used by multiple ecommerce and other consumer internet companies. It seems that the ecommerce giant is now spending heavily to take a similar position in Indian logistics with ATS.
Also, in July 2017, the company infused about $260 Mn (INR 1,680 Cr) in Amazon Seller Services. This took the total money invested in the Indian unit to about $2.1 Bn (INR 13,800 Cr).
It was also reported that Amazon India has updated its shipping costs for sellers using Amazon Transportation Services to deliver orders to out-of-state customers. The new shipping charges, which will come into effect from August 8, 2017, are applicable under the Fulfilled by Amazon (FBA) programme.
What Is Amazon Counting On?
After getting into a tug of war in ecommerce with Flipkart, it is now placing its hopes on other hotbed sectors in the Indian ecosystem. Since the beginning of this year, we have already seen the US-based ecommerce company’s aggressive plans to conquer sectors such as grocery and digital payments in India. It recently poured in $20 Mn in Amazon Pay India too. Also, the company received the final nod from the government for its proposed $500 Mn investment in food retail in India. It is expected to launch the new food retail venture by Diwali.
Apart from grocery and digital payments, logistics is another growth vertical for India, poised to grow into a $307 Bn industry by 2020. As stated in an earlier statement by the company, “Amazon wants to build ATS into an independent logistic service which competes against Flipkart’s Ekart and other independent logistics services like Blue Dart and FedEx.” How well Amazon’s hopes are fulfilled the in Indian logistics segment with ATS, remains to be seen.