Amazon Infuses Rs 1,600 Crore into Indian Arm, Expands Operations


Amazon has invested Rs 1,600 crore into its India-based entity, Amazon Seller Services, as per regulatory filings. This infusion of funds coincides with the company's recognition of significant growth in emerging markets like India. Amazon continues to enhance its product selection and features while striving towards profitability.

This marks the second occasion in five months that Amazon has injected funds into its Indian subsidiary, Amazon Seller Services, as indicated by regulatory filings. Prior to this, Amazon had already invested more than Rs 1,000 crore in its Indian operations this year. In February, its marketplace segment received Rs 830 crore, while in January, Amazon invested Rs 350 crore in the entity overseeing its fintech division, Amazon Pay.

Flipkart, Amazon's primary competitor, has recently secured close to $600 million in new funding from its parent company, Walmart, and an additional investor. According to industry insiders, Flipkart has been in discussions with investors to raise a total funding round of approximately $1 billion. The company intends to utilize the capital to enhance its infrastructure, bolster its support system for sellers, and invest in cutting-edge technologies.

Meesho, supported by SoftBank, has recently concluded a $275 million funding round, which includes a combination of primary and secondary share sales. This funding is a component of a broader $600 million financing round that the company is aiming to secure. The e-commerce sector in India is expected to undergo significant expansion, projected to grow fivefold from $59 billion in 2022 to an estimated $300 billion by 2030, primarily driven by value-conscious "mass" consumers.

As a strategy to tap the market deeper, Amazon recently introduced a special store called 'Bazaar' in India, featuring low-priced, unbranded fashion and lifestyle products. Amazon’s goal is to cater to a particular group of customers who prioritize affordability over brand names. This strategy could present a challenge to Meesho, known for providing budget-friendly consumer goods sourced from local retailers.

In the 2023 shareholder letter, Amazon CEO Andy Jassy expressed that the company observes significant advancements in emerging markets, such as India, while continuing to broaden its range of offerings and features as it progresses toward profitability. Amazon also announced that over 7 billion items were delivered the same day or the next day in 2023, with expectations for even swifter delivery times in 2024.

Amazon is increasing its investment in India by pledging an additional $15 billion over the next seven years, bringing the total investment across all its Indian operations to $26 billion. This announcement was made last year when Amazon CEO Andy Jassy held discussions with Indian Prime Minister Narendra Modi during their meeting in the US. Notably, this investment encompasses $12.7 billion earmarked by Amazon Web Services (AWS) to be invested in India by 2030.