Amazon Fuels Additional $200Mn In India Unit

Amazon has fuelled approx $200 Mn (INR 1350 Cr) investment, in its Indian unit.

According to filings with the Registrar of Companies, the latest investment in Amazon Seller Services, was done in March,  a few weeks before India introduced discounting and vendor-related restrictions for online marketplaces.

Earlier in April 2016, in order to grab the largest share in the ecommerce marketplace in India, Amazon India almost doubled its authorised capital to $2.4 Bn (INR 16,000 Cr), exceeding its capital commitment of $2 Bn (about INR 13,000), that it committed in July 2014.

India’s e-commerce market is expected to grow to $103 Bn by 2020, as per a report by Goldman Sachs.  And home-grown ecommerce biggies are all set to take advantage.

Gearing up to compete with the competition, Amazon has been investing heavily in India to overtake its local rivals Flipkart and Snapdeal. In February 2016, Amazon invested about $300 Mn (INR 1,980 Cr.) in Amazon Seller Services, as per ROC. Earlier it infused $250 Mn (INR 1,696 Cr) through a rights issue in December 2015. The latest infusion takes Amazon’s total investment to about $1.2 Bn (INR 8,618 Cr) in Amazon Seller Services, since early 2015.

As per the new rules on the FDI policy, an ecommerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies. However, this will definitely trouble Amazon as Cloudtail India Pvt. Ltd, the biggest seller on Amazon India, contributes at least 40% of the company’s sales.

The development was reported by ET.

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