Wednesday 10 February 2016

Amazon raises the stakes; pumps Rs. 1,980 crores into India

In keeping with Jeff Bezos’ promise to invest in India, Amazon has added Rs. 1,980 crores to its Indian arm. The cash-rich company put in Rs. 1,696 crores in Amazon India in December 2015.

Big Money! Big Results!

Amazon has been trying to maintain traction in the Indian ecommerce market since it entered the scene in 2013. Its main contenders have been the home grown companies Flipkart and Snapdeal.

Active seller base boosts inflow of funds to India

Amazon has found great incentive from its increasing seller base, which has encouraged the company to pump in funds in multiple rounds.
“We’re really encouraged with what we are seeing, both on the customer side and the seller side,” said senior Vice President and CFO, Brian Olsavsky, “About 90 per cent of our sellers are using our logistics and warehouse services. And as a result, we’ve tripled our fulfilment capacity year-over-year.”
The company has spent a large chunk of its funds in creating fulfilment centres and warehouses.
As Olsavsky says, “India is a different market and does not have a lot of the same ready fulfilment options that some other countries did. We see that as an opportunity.”
The fact that Amazon has access to heavy funds might cause alarm to local players like Flipkart, who is having a tough time in matching the kind of moolah that the US based Amazon is able to stack up.
Reports suggest that Alibaba would like to acquire stakes in Flipkart and Snapdeal, but is finding it too costly.

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