Amazon invests Rs1,680 crore more in its India unit

[DrPuff]

The Rs1,680 crore investment is part of Jeff Bezos’s commitment to invest $5 billion in India, where it’s competing with Flipkart to dominate the e-commerce market

Since Amazon CEO Jeff Bezos made that initial $2 billion investment commitment in July 2014, Amazon India has already received more than Rs15,000 crore ($2.31 billion). Photo: Hemant Mishra/Mint

Bengaluru: Amazon, the world’s biggest online retailer, has invested another Rs1,680 crore in its Indian unit as part of its commitment to invest $5 billion to expand its local business, which is locked in a battle with arch-rival Flipkart to dominate what is seen as the world’s last major unconquered Internet market.

Amazon Seller Services Pvt. Ltd (Amazon India) received the funds last month, according to regulatory documents filed with the ministry of corporate affairs.

In June 2016, Amazon.com Inc. had said it would invest an additional $3 billion in India after the company exhausted its earlier investment pledge of $2 billion made in 2014.

Since Amazon chief executive Jeff Bezos made that initial $2 billion investment commitment in July 2014, Amazon India has already received more than Rs15,000 crore ($2.31 billion).

Amazon has been spending all that cash on building massive warehouses, a large logistics unit, marketing, discounts and increasing product assortment.



The firm boasts of the largest product assortment, the most expansive supply chain and the largest seller base among e-commerce firms in India.

Mint reported last April that Amazon India, which was launched in June 2013, had doubled its authorized capital to roughly about Rs16,000 crore. Since then, Amazon has invested twice in its Indian marketplace—a Rs2,010 crore infusion in December last year and the latest in June.

Its authorized capital was just Rs1,500 crore in July 2014, when Bezos made the $2-billion commitment. Amazon’s aggressive investment in its India business is matched by Flipkart’s own capital-raising prowess. In April, Flipkart raised as much as $1.4 billion in fresh capital from new strategic investors comprising China’s Tencent Holdings, eBay and Microsoft. Flipkart, which has raised more than $4.6 billion since starting out in 2007, is preparing to buy out smaller rival Snapdeal as part of a proposed deal aimed to get further investments from Snapdeal’s largest investor SoftBank.

“We remain committed to our India business with a long-term perspective to make e-commerce a habit for Indian customers and to invest in the necessary technology and infrastructure to grow the entire ecosystem,” said an Amazon India spokeswoman.

Amazon’s massive investment has yielded immediate results for the American e-commerce giant.

Though Flipkart continues to be the overall market leader, including sales from its Myntra and Jabong units, Amazon India is catching up fast.

Amazon is desperate to conquer the Indian Internet market, after losing out to Alibaba.com in China.

http://www.livemint.com/Companies/P...ests-Rs1680-crore-more-in-its-India-unit.html

 

[ito]

Seem Snapdeal is dead...just two years back it was valued $6 Billion, now Flipkart is offering just $850 million. FlipKart is just surviving against Amazon onslaught...unless government supports Flipkart, there won't be Flipkart in next 5 years.

 

[Rajaraja Chola]

Flipkart should take the war to the United states. It doesnt make sense to fight Amazon with its dollar money in India. Infact Paytm is becoming more profitable and they have a Canada branch recently and planning to compete in US soon. Flipkart should think Global.

 

[T-72]

Seem Snapdeal is dead...just two years back it was valued $6 Billion, now Flipkart is offering just $850 million. FlipKart is just surviving against Amazon onslaught...unless government supports Flipkart, there won't be Flipkart in next 5 years.

didn't they go mobile app only some time back ?

I used to do some shopping on FK and SD but lately on Amazon only, very reliable and convenient, don't care if they monopolize the segment.

 

[soundHound]

Bezos is pumping dollors like crazy and he went stop until FK is dethrone and dusted, basically FK has to gear up on all the front be it logistic or technology. I believe FK will try its best to take over snapdeal, once it does that it will gain backing of tenacent and softbank both, which will provide enough fire power to fight with Amazon.

 

[ito]

didn't they go mobile app only some time back ?

I used to do some shopping on FK and SD but lately on Amazon only, very reliable and convenient, don't care if they monopolize the segment.

I too stopped buying from FK and SD. Amazon has better return policy and good customer service.

Bezos is pumping dollors like crazy and he went stop until FK is dethrone and dusted, basically FK has to gear up on all the front be it logistic or technology. I believe FK will try its best to take over snapdeal, once it does that it will gain backing of tenacent and softbank both, which will provide enough fire power to fight with Amazon.

FK doesn't have the deep pockets of Amazon. And FK cannot keep on raising money from investors forever to fight Amazon and not be proftable. There will come a time when Amazon will acquire FK.

 

[turbofan7a]

Amazon made the most important change was the return policy, which made people to flock to amazon.

 

[ito]

Amazon made the most important change was the return policy, which made people to flock to amazon.

Also its prime membership is attractive...you pay 500 rs per year, you get one year subscriptions to Amazon Prime Videos and free shipping through out the year. So this helped Amazon cultivate certain loyalty among its customers.

 

[soundHound]

I too stopped buying from FK and SD. Amazon has better return policy and good customer service.



FK doesn't have the deep pockets of Amazon. And FK cannot keep on raising money from investors forever to fight Amazon and not be proftable. There will come a time when Amazon will acquire FK.

Amazon made first profit after a decade or so, as of now as well AWS earns the most while its commercial arms mostly burns, I agree FK does not have deep pockets, but certainly having investors with deep pockets helps.

It will be disheartening to see poster boy of Indian startup go like that.

 

[Zen0]

I still use flipkart .

 

[ito]

Amazon made first profit after a decade or so, as of now as well AWS earns the most while its commercial arms mostly burns, I agree FK does not have deep pockets, but certainly having investors with deep pockets helps.

It will be disheartening to see poster boy of Indian startup go like that.

Yes, that is why I say that government should intervene and protect FK. As on investors of FK...they are financial investors and are not strategic investors hence they want return back on their investments...if FK is not profitable within next 5 to 6 years, the investors themselves might force FK to be acquired by Amazon and thus liquidate their investments in FK.

 

[pikkuboss]

Amazon would incur loss, but won't let users be unsatisfied. I bought a pen drive of 128GB for Rs.99 with price error from their side and the product was actually delivered.

Players like Reliance, Alibaba led Paytm have to step in.

 

[Jackdaws]

Amazon pulled out of China so India is a big test case for Bezos. He doesn't want to fail. Flipkart is burning cash. It bought Myntra, Jabong, Ebay India and now looking at acquiring Snapdeal. Flipkart does more shopping online than people do on Flipkart.

Flipkart can't just enter the US market. It is a completely different ball game than India. Google, Netflix, Amazon, Facebook - these are just behemoths like companies like Kodak were half a century ago.

 

[SrNair]

Bring in the Alibaba .Give them a share ,Dissect the market equal for FP ,Amazon and Alibaba .
Support FP and kick out the rest

 

[swnjo]

I really like mytra, its a big hit in N.E. I hope it doesnot go down with FK . Amazon's clothing options are very poor.