Despite Losing 1 Cr/Day, Amazon India Raising Rs 1155Cr Through Rights Issue To Fund Expansion
Last year, Amazon India lost approximately Rs 1 crore every day for their operations but it hasn’t deterred them from their focus. As per a recent filing with Registrar of Companies (RoC), it has been revealed that Amazon India is raising the money through a rights issue to its parent.
It would be single largest accumulation of funds in Amazon India, since their entry into the Indian market in 2013.
Here is the timeline of Amazon India’s venture pool, which is right now sourced from their parent company:
- March, 2015: Rs 1155 crore (latest round)
- December, 2014: Rs 610 crore
- September, 2014: Rs 410 crore
- March 2014: Rs 322 crore
- Total: Rs 2497 crore
In November, 2014, they had officially raised the ‘authorized share capital’ from Rs 1500 crore to Rs 3500 crore.
In July last year, Jeff Bezos had announced that they will be investing upto $2 billion (Rs 12000 crore) in Amazon India operations to take on Flipkart and other ecommerce players which have first mover’s advantage in the lucrative Indian ecommerce market.
Last year, Indian Ecommerce companies were able to sell Rs 33,000 crore ($5.5 billion) worth of products, which is expected to swell to Rs 5 lakh crore ($70 billion) in the next 5 years.
It seems that the latest round of fund raising would be dedicated to improve their infrastructure, logistics and focus on mobile ecosystem.
An Amazon spokesperson said, “We continue to invest in infrastructure and logistics, to enable our sellers to service customers across the country at low operating costs; and in technology, especially mobile, to enable easy, anywhere, anytime access for our customers and sellers,”
Ever since Amazon India opened their shop in 2013, they have done some remarkable and amazing things to lure the new age Indian consumer and to increase their market share. Some of them include:
- Affiliate partnership with IRCTC
- Inhouse Payment Platform: Pay with Amazon
- Amazon Fresh: Food and Beverage eStore
- Partnership with Future Group
- Partnering with Kirana Store Owners for pick-up
- Partnering with Microsoft
- Cash on Delivery with India Post
- Exclusive partnership with Oppo Mobile Phones & One Plus
- #AmazonCart: Twitter partnership
- Drone deliveries
- Collaboration with Narayan Murthy, founder of Infosys
- Exclusive Fashion portal
And the results are encouraging to start with, as they have opened their 2nd fulfillment center, within 7 months of their operations and also opened store pick-up centers in Delhi and Mumbai. Talks are also on to start their B2B operations very soon; along with introduction of Amazon Prime in India and rumors of acquiring Jabong.