A day after Flipkart picked up a whopping $1 billion in
funding, global online retailer Amazon said that it would invest as much
as $2 billion in India to support its “rapid growth and to enhance
customer and seller experience”.
The company,
however, did not disclose the timeline by which its investment would be
made. In comparison, home-grown e-tailer Flipkart has raised a total of
$1.78 billion since its inception.
Huge potential
“We
see huge potential in the Indian economy and for the growth of
e-commerce in India. With this additional investment of $2 billion, our
team can continue to think big, innovate, and raise the bar for
customers in India,” CEO Jeff Bezos was quoted as saying in a statement.
At
current scale and growth rates, Mr. Bezos said, “India is on track to
be our fastest country ever to a billion dollars in gross sales.” “A big
‘thank you’ to our customers in India—we’ve never seen anything like
this.”
Aggressive expansion
Amazon
entered India with an online market place—as Indian law does not allow
the company to sell its own goods—a year ago and has been expanding
aggressively since then. The $2 billion investment by the global online
retailer comes even as Amazon is facing pressure from Wall Street
investors to cut spending and improve margins. The company, last week,
posted a loss of over $120 million for the latest quarter.
This
recent immense investment into the Indian e-commerce sector is betting,
according to analysts, on the potential of the market. Though estimates
vary wildly, most consultancies and brokerages believe that the Indian
e-commerce market will be worth $50 billion by 2020, up from the current
$2-3 billion right now.
Shoes category
When
asked if the investment would go into strengthening categories such as
fashion , which Flipkart is strong in, Amazon India Country Manager Amit
Agarwal pointed out that the ‘shoes category’ was one of the fastest
growing.
“In a very short time, we are seeing growth
rates we have never seen before. Categories such as watches, shoes and
baby products are all growing very fast. We have invested very
aggressively and our mission is to be India’s most customer-centric
company,” he said.
Based on The Hindu.
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