Indian ecommerce portals Flipkart, Snapdeal and Paytm have a reason to worry now because Amazon has just revealed their plans for India; and it translates to complete dominance.
While attending an event in Washington where PM Modi was present, Amazon founder Jeff Bezos said that they are committing their investments in India to $5 billion. Earlier, in 2014, Amazon had promised $2 billion of investments in India to counter Flipkart. Hence, within a span of two years, Amazon’s total investment has more than doubled, taking it to $5 billion or Rs 33,000 crore.
Bezos said, “I can assure you it’s only the beginning and as we say in Amazon, it’s only day one,”, adding that India is Amazon’s fastest growing region and shared his plans when it comes to complete domination of ecommerce space.
In the last two years, ever since Amazon announced their India plans (and $2 billion investment), Amazon Seller Services Pvt Ltd (Amazon India’s official name) has received Rs 12,080 crore ($1.7 billion) as per documents from Registrar of Companies. Besides these, Amazon has infused considerable amount of money into Amazon Transportation Services Pvt. Ltd and Cloudtail India Pvt. Ltd, which is Amazon’s JV with Catamaran Ventures.
Where Will Amazon Invest Their Money in India?
As per Jeff Bezos, investments would be used for various purposes, which includes:
- Helping startups in India; and encouraging entrepreneurship and making India an ‘innovation hub’
- Web Services Cloud Region would be opened in India this year
- Hyderabad will get Amazon’s largest software engineering and development center outside USA
- This center would help the local economy as ‘significant’ number of jobs would be created (we had earlier reported that Amazon will invest Rs 1800 crore in this facility, which would be spread across 2.5 million square feet area)
- 21 fulfillment centers have already been opened in India, with total capacity of 5 million cubic feet space of storage
- Besides these plans, some of the plans regarding Amazon’s expansion which we had reported earlier:
- Plan to provide financial help (loans) to Indian SMEs; these are invite-only loans, available to selected sellers
- Plans to launch Amazon Prime and Instant Video in India
Jeff Bezos Mentions India Post
During the event, Jeff Bezos mentioned India Post for helping them to reach all serviceable postal codes in India.
Note here, that increased orders from Amazon and other ecommerce ventures have helped India Post to post 37% more revenues.
In November last year, Amazon become India’s most visited ecommerce portal with 200 million visits; which clearly showcases that Amazon has played the cards well, and have made a major impact in the Indian ecommerce segment.
In terms of revenues, Amazon is not doing that bad either: In January in this year, we reported that they managed revenues of Rs 1022 crore with loss of Rs 1724 crore for financial year 2014-15.
With rumors of possible merger of Alibaba with Flipkart already on, it would be really interesting to observe how Amazon’s fresh investment of $5 billion brings out in India.