Amazon has invested another Rs 2,900 crore ($443 million) in its India unit as part of its commitment to invest $5 billion to expand its Indian business.
Amazon has invested another Rs 2,900 crore ($443 million) in its India unit as part of its commitment to invest $5 billion to expand its Indian business. With this fresh round of infusion, Amazon has pumped in about $1 billion into Amazon Seller Services (Amazon India) in the current financial year itself. The development also comes on the back of Morgan Stanley’s statement on Monday that Amazon could become a $1-trillion company within one year.
While in June, Amazon India received a funding of Rs 1,680 crore, it got another round of funding of Rs 1,620 crore in September. In the latest round, Amazon has raised the sum from its Singapore-based group entity Amazon Corporate Holdings and another Mauritius-based group entity Amazon.com.incs. The infusion of funds has come despite Amazon reporting a $936-million loss from its international business unit for three months ended September 2017. The loss for the US-based e-tailer comes on the backdrop of the company’s heavy investment in India.
In June 2014, Amazon chief executive officer Jeff Bezos made an initial $2-billion investment commitment for its India business. In 2016, Amazon.com Inc had said it would invest an additional $3 billion in India where it is locked in a bitter battle with arch-rival Flipkart to consolidate its domination in the Indian e-commerce market. Recently during a post-quarterly result call, Brian T Olsavsky, chief financial officer at Amazon, said, “It is international expansion and primarily in India where we’re continuing to add benefits. And we launched Prime there a year ago if you remember, and we’ve had more Prime members join in India than in any other country in the first 12 months.”
Amazon’s continued investments in India and its fight with Flipkart has impacted its margins over last few quarters. While in the June quarter, the company reported an international loss of $724 million, it incurred a loss of $481 million for the quarter ended March 2017. Despite heavy loss, Amazon still bets heavily on India market. Olsavsky, said, “We had the first Prime Day sale there this year, Prime Music, Amazon Business are also expanding in India. So, a lot of positive momentum and investment going on in India, we are very pleased with that. We also recently announced Echo and Alexa will be available in India”.
Amazon’s aggressiveness in India market has been equally met with the home grown Flipkart raising $2.5 billion from Softbank and another $1.4 billion from Tencent Holdings, eBay and Microsoft.