Amazon raises Indian investment by over US$385m

The latest capital infusion from the USA-based ecommerce company will bring its total investment in the nation to around US$4 billion

August 14, 2018

Amazon is employing the funds in expanding its offerings, marketing and discounts, expanding infrastructure and logistics capacity

Amazon had previously announced plans to invest at least US$5 billion in its India business and additional US$500 million in food retail

India's ecommerce market is touted to reach US$220 billion in terms of gross merchandise value (GMV) and 530 million shoppers by 2025

India’s retail market is expected to reach US$ 1.1 trillion by 2020, on the back of rising incomes and increased digital connectivity

Amazon.com has raised investment in its Indian operations by over US$385 million, according to media reports on August 14, citing a company statement. The latest capital infusion from the USA-based ecommerce company will bring its total investment in the nation to around US$4 billion. Amazon has been operational in India for five years. Additionally, Amazon has invested more than US$14 million to strengthen its food retail business in India. The financing is critical for Amazon to effectively compete in the fast-growing Indian retail space, and follows USA-based rival Walmart’s US$16 billion acquisition of Flipkart, an Indian ecommerce platform. Amazon is employing the funds in expanding its offerings, marketing and discounts, expanding infrastructure and logistics capacity.

Amazon had previously announced plans to invest at least US$5 billion in its India business as well as an additional US$500 million in the country’s food retail operations. India has emerged as Amazon’s most important market outside the USA, given the region’s growth potential. India’s retail market is expected to increase by 60 per cent to reach US$ 1.1 trillion by 2020, on the back of rising incomes and expanding middle class and increased digital connectivity. Meanwhile, Indian ecommerce sales are expected to reach US$120 billion by 2020 from US$30 billion 2016, which has generated great amount of investor interests. To encourage investors, Government of India amended foreign investment (FDI) policy to allow 100 per cent foreign investment in online retailing of products in India.

Further, India’s ecommerce market is expected to reach US$220 billion in terms of gross merchandise value (GMV) and 530 million shoppers by 2025. Opening up of markets into Tier-2, Tier-3 cities and beyond, on the back of improving connectivity, has further boosted investment. To ride this growth, Walmart is looking to open up to 20 new wholesale outlets across India by 2021 as part of a plan to launch a total of 50 new stores by 2025. The company currently owns and operates 21 wholesale stores in nine states across India as well as two fulfillment centres in Mumbai and Lucknow. As part of the local expansion, foreign companies have prioritised local sourcing for the products they sell as well as for technology development. This has opened up thousands of new job opportunities.

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