Amazon To Grab Larger Share Of Ecommerce Pie In India; Plans $5 Bn Warchest

Asserted to be world’s largest online retailer, Amazon plans to bet much bigger in India. With the completion of two years in Indian market the US-based retailer plans to announce plethora of services for Indian consumers to capture the largest share of commerce pie, according to a new report by ET Tech. 

Amazon is planning:

• A $5 Bn (INR 31,700 Cr) warchest for India
• The launch of subscription-based ecommerce services, Amazon Prime
• Launch Amazon Instant Video (AIV)

However, Amazon declined to comment on the above mentioned developments, “We do not comment on what may or may not do in the future,” the spokesperson said.

As per a research by Morgan Stanley, India’s online retail market is expected to cross $100 Bn mark by 2020 and the Indian Internet market as a whole is expected to raise $137 Bn by the same year. Riding on the statistics, Jeff Bezos is all set to give a tough competition to the India’s home-grown ecommerce players viz Flipkart, Snapdeal and Paytm.

Explaining further the announcements made by Amazon, it is planning an investment of $5 Bn to expand its network of warehouses, data centres and beef up its online marketplace. The company had earlier announced $2 Bn of investment to support its rapid growth and enhance its customer and seller experience in the country.

With this Amazon also plans to launch subscription-based ecommerce services for high-end buyers, called Amazon Prime, later in the year. This is being seen as in direct competence with Flipkart’s subscription-based service which was launched last year.

Besides, Amazon has started conversations with music labels and producers for sourcing content to launch Amazon Instant Video (AIV) service in India. The company has already hired Nitesh Kripalani, a former Sony Entertainment executive, to lead its new initiatives.

Just last month, it was reported that Amazon India recorded highest traffic of 23.6 Mn unique visitors surpassing its biggest rivals. The company has a business of worth at least $2 Bn in gross merchandise value on the ecommerce side, and includes fast growing revenue from top Amazon Web Services (AWS) customers in the country. It also reports a total of 12 fulfillment centres across nine states in the country with a total of 22 million products listed on its platform.

A person familiar with the company’s plans said, “Our biggest financial backer (Amazon founder Jeff Bezos) doesn’t need a fresh pitch while deciding every new investment — we are really long on India, investment figures are easily in multiples of billion dollars.”

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