Amazon invests another $443 million into its India operations

Cornelia Mascio
Novembre 15, 2017

With this fresh investment, the parent company has invested Dollars 1 billion into Amazon Seller Services (Amazon India) so far in the current fiscal year. The ecommerce giant has nearly doubled its authorized capital to $4.74 Bn (INR 31,000 Cr), matching its earlier capital commitment of $5 Bn made in June previous year. "We are delighted and humbled by the trust from our customers, to lead in India on things that matter to our customers in over four years of our business, while continuing to launch innovative India-first initiatives as well as completely new offerings like Echo, Prime and Prime Video", said an Amazon India spokeswoman in response to a query from Mint.

Brian T Olsavsky, chief financial officer at Amazon, told FE, "It is global expansion and primarily in India where we're continuing to add benefits".

"We had the first Prime Day sale there this year, Prime Music, Amazon Business are also expanding in India".

Amazon, which made a mammoth capital commitment of $5 billion in June last year, pumped the $443 million to its marketplace arm in India and it is at least the third such capital infusion this year. "Flipkart will have in excess of $4 billion of cash on balance sheet", it added.

A report in Economic Times quotes Arvind Singhal, head of retail consultancy, Technopark, saying that this shows that Jeff Bezos' commitment of $5 billion to the Indian marketplace was not symbolic and that Amazon is using its investment in three areas - creating fulfillment centres, spending more on customer acquisition through Prime, and strengthening its distribution infrastructure. Since then, Amazon has invested twice in its Indian marketplace-a Rs2,010 crore infusion in December past year and another Rs1,680 crore investment in June. However, at the end of it, Flipkart emerged the victor.

Flipkart has also been raising funds and its profile boasts of investors like Japan's SoftBank Group Corp., China's Tencent Holdings Ltd, South Africa's Naspers Ltd and Accel Partners.

Amazon's willingness to pump in more funds is especially significant at this point, because it comes after a bruising festive season battle against Flipkart where it lost out to the Indian online retailer, as Mint reported on 27 September.

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