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Amazon to take on Flipkart, plans $2 bn investment in India biz
MUMBAI: The e-commerce space has just got hotter. Just a day after Flipkart announced $1 billion fresh funding, its rival Amazon has announced plans to invest additional $2 billion in India to support its rapid growth and continue to enhance the customer and seller experience in the country.
Launched a year ago, Amazon’s marketplace has grown to be among India’s largest with over 17 million products and serving customers with its guaranteed next-day delivery service. However, it faces stiff competition from another leader Flipkart, which too has enhanced its services and marketplace to maintain its stronghold in the space.
Amazon.com founder and CEO Jeff Bezos said, “After our first year in business, the response from customers and small- and medium-sized businesses in India has far surpassed our expectations. We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate and raise the bar for customers in India. At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales.”
Earlier this week, Amazon said it would open five new centres across India in addition to its two fulfilment centres (FCs) in Mumbai and Bangalore. The FCs will be set up in Delhi, Chennai, Jaipur, Ahmedabad and Tauru (outskirts of Gurgaon). The company stated that the move would help in faster delivery of products.
Other competitors in the space include Snapdeal, fashion e-tailer Jabong, and US auctioneer eBay Inc.
In May, Bangalore-based Flipkart raised $210 million from Russian firm DST Global Solutions and acquired fashion portal Myntra for an estimated $300–330 million to strengthen its position in the fashion space. New Delhi-based Snapdeal, which raised $100 million in May, mostly from investors such as Temasek Holdings, BlackRock Inc and PremjiInvest, earlier in February got $134 million from eBay Inc and others.
Amazon.in offers products across a broad range of categories including books, e-books, tablets, movies, TV shows, Kindle devices, computers and accessories, mobiles and accessories, consumer electronics, toys, games, baby products, health, personal care products, watches, fashion jewellery, home and kitchen products, beauty products, video games, music, luggage and bags, sports, fitness and outdoor equipment, shoes, men, women and kid’s wear and more.