Amazon Infuses $385.7 Mn For Trade War Ahead Of Flipkart-Walmart Deal

Amazon is pumping fresh capital into Amazon Seller Services, its India unit, to gear up for the trade war against domestic rival Flipkart ahead of the Flipkart-Walmart deal. Amazon Corporate Holdings and Amazon.com Inc have allocated $385.7 Mn (INR2,600 Cr) investment to the Indian marketplace unit, according to filings to the corporate affairs ministry.

A recent LiveMint report added that the board of directors of Amazon Seller Services passed the resolution at its meeting on April 26, 2018. The fresh funds will act as an arsenal for Amazon.in, which has been aggressively investing in expanding infrastructure and adding solutions to enhance consumer and seller experience.

So far, Amazon has infused over $3 Bn in Amazon Seller Services. Prior to this, in January this year, Amazon Seller Services had received a fund infusion of $306 Mn (1950 Cr) from the parent company.

The Amazon India spokesperson said, “As India’s fastest growing ecommerce player with a long-term commitment to make ecommerce a habit for Indian customers, we continue to invest in the necessary technology and infrastructure to grow the entire ecosystem”.

The spokesperson added: “We are delighted and humbled by the trust our customers have shown for us to lead in India on things that matter to them just within five years of our business here. We will continue to launch innovative India-first initiatives as well as completely new offerings like Echo, Prime, Prime Video, and Prime Music.”

The US e-tail giant is expanding and strengthening its war-chest in light of the recent development that involves Flipkart’s deal with US-based retail giant Walmart, which is going to be worth $15 Bn.

Amazon founder Jeff Bezos has already committed investments worth $5 Bn to the Indian market. Amazon CFO Brian Olsavsky, during a recent investor call, said the company would continue to invest in India. He added that Amazon was seeing “great progress” with both sellers and customers in India, even though the company registered a loss of $622 Mn from international operations in the first quarter of 2018.

The American ecommerce giant has been investing in other entities in India, including Amazon Pay, Amazon Pantry (online groceries), and the wholesale business. The investments are now being used in building warehouses, strengthening logistics, and increasing product assortment to gain an edge over its rivals in the growing ecommerce space in India, which is poised to reach $73 Bn by 2022.

Apart from its trade war with Flipkart, Amazon has always taken the Indian market very seriously which is evident given the funds it’s pumping into marketing and promotions with an aim to bring more consumers to its online shopping platform.