Ecommerce: Amazon India bullish despite growth hiccup by segment in 2016

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Bengaluru | Published: February 4, 2017 5:05:53 AM

E-commerce giant Amazon remains bullish on Indian e-commerce market for the long term and will continue to introduce new features for the customers, sellers even as the overall segment in the country declined in growth during 2016.

Amazon has committed an investment of billion in the Indian e-commerce market and has emerged as the number two player overtaking Snapdeal while giving stiff competition to the leader-Flipkart. (Reuters)Amazon has committed an investment of billion in the Indian e-commerce market and has emerged as the number two player overtaking Snapdeal while giving stiff competition to the leader-Flipkart. (Reuters)

E-commerce giant Amazon remains bullish on Indian e-commerce market for the long term and will continue to introduce new features for the customers, sellers even as the overall segment in the country declined in growth during 2016.

Amazon has committed an investment of $5 billion in the Indian e-commerce market and has emerged as the number two player overtaking Snapdeal while giving stiff competition to the leader – Flipkart.

This global expansion for the US headquartered company has also resulted in Amazon posting an operating loss of $487 million in its international operations for the quarter ending December, 2016 as compared to $108 million a year ago period.

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Amazon CFO Brian T Olsavsky in an investor call following the results said, “India continues to be a large investment….So, it’s very early. We are very encouraged with what we’ve created with customers and sellers alike in India over the last few years.” Amazon continues to make fresh investments in India and also introduced some of its global products in the market. It recently launched its Amazon Prime service and the company indicated that its video service continues to be global in nature. A a recent report by RedSeer Consulting said that the e-commerce industry in India which grew by 180% in 2015 declined to 12% growth in 2016 due to a combination of internal and external factors.

According to RedSeer, the biggest impact of this adverse market condition was faced by the established players like Flipkart and Snapdeal, whose growth remained flat, if not worsened.

Whereas, the new entrants like Amazon succeeded in altering the market share game and captured big portion of the aggressively-contested industry, it said.

The consulting firm projected that e-commerce industry will have to clock a growth of 45% CAGR to reach a size of $80 billion by 2020 from the current level of $14.5 billion.

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