Online Marketplace Amazon To Invest $17 Mn In India’s Wholesale Vertical

In a bid to gain an edge over competitors, Amazon has reportedly decided to invest a fresh capital of $17 Mn (INR 115 Cr) in its wholesale arm, amazonbusiness.in.

With the round of investment, the total capital raised by the wholesale arm would amount to $23 Mn (INR 155 Cr), reported ET.

Amazon Wholesale (India) Pvt. Ltd was founded in 2013 by Seattle-based tech company Amazon and functions as the B2B portal of the company in India. It also facilitates the sale of smartphones to sellers on Amazon India.

According to its official website, the B2B arm currently serves small and medium business (SMBs) in Bengaluru and Mangaluru, and deals in office products, stationery, household supplies, healthcare products, personal care, food, and beverages.

Amazon Business currently accounts for more than 10,000 sellers in Bengaluru, as per an official statement.

In order to comply with the updated FDI norms that prevent a single merchant from accounting for more than 25% sales on an ecommerce platform, Amazon India has also reportedly increased the transaction of smartphones via its B2B portal.

Amazon India’s biggest merchant Cloudtail also stopped the sale of smartphones via the online platform in accordance with the new norms. Cloudtail is a joint venture between Amazon Asia and Infosys founder NR Narayana Murthy’s private investment fund Catamaran Ventures. Cloudtail was hitherto the largest merchant on Amazon India.

Whereas earlier, handset makers used to bill their products and inventory directly to Cloudtail, they are now being directed to bill them to Amazon Wholesale (India) Pvt. Ltd, an affiliate of Amazon.com, which has led to an increase in the capital requirements for the latter.

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 this month, Amazon India also increased its last mile delivery network. It now includes 12,500 local stores and retail outlets in 50 cities.

This development was reported by ET.