BENGALURU/MUMBAI (TIP): As the Seattle-based e-commerce juggernaut Amazon closes in on the pole position of the Indian e-commerce market, its founder & CEO Jeff Bezos has announced that his company will pump in an additional$3 billion investment into India, taking its total capital commitment here to $5 billion. Amazon, which recently completed three years of operations in India, has been rapidly gaining market share as it fights out home-grown players like Flipkart and Snapdeal, whose growth has plateaued in contrast.
Amazon’s intent to invest a blockbuster $3 billion in India puts more pressure on the two local incumbents to raise new financing rounds and gear up with ammunition for a long-haul battle with the world’s largest online retailer. Amazon has taken over the number two slot from Snapdeal in terms of shipments and gross sales, but Flipkart is still the largest e-tailer in the country.
“Our Amazon.in team is surpassing even our most ambitious planned milestones, and I’m pleased to announce today that we’ll invest an additional $3 billion on top of the$2 billion that we announced in 2014, bringing our total investment in India to over $5 billion,” Bezos, 52, who founded Amazon in 1994, said.
This investment has no time frame for deployment, a company executive said, but is expected to be ploughed in quick time as the e-tailer builds infrastructure to push its growth in India.
To put things into perspective, Amazon’s nearest rival, the eight-year-old Bengaluru-based Flipkart has till date raised $3.2 billion from financial investors while online marketplace Snapdeal has racked up around $1.5 billion in risk capital.
In July 2014, Amazon had allocated $2 billion for India in the e-tailer’s first aggressive move, which kick-started the fierce e-commerce war in India. That had come a day after Flipkart said it had scooped up an eye-popping $1 billion from investors.
Almost all of that $2 billion has already been used up by Amazon as it’s been discounting heavily, investing in logistics, and weaning away sellers from other players with lucrative programmes.
Bezos made the latest investment announcement while receiving the US India Business Council’s global leadership award at an event attended by Indian PM Narendra Modi, who is currently visiting the US. “I can assure you, it’s only the beginning and as we say in Amazon, it’s only day one,” he said. He said Amazon has already created about 45,000 jobs in India.