Amazon certainly has extensive resources. The etailer committed $5 billion towards its businesses in India. It will use these funds to develop infrastructure and technology for the betterment of country’s ecommerce industry. Also, a total of $500 million will go towards its newly approved food retail business.
But, retail is not the only thing Amazon is investing in. The ecommerce company poured fresh funds of Rs.67 crore into its payment arm Amazon Pay. And, recent reports claim that it infused a massive amount of funds into Amazon Wholesale.
The wholesale division of the firm received a total of Rs.100 crore ($15.5 million) last year in December, as per filings with the Registrar of Companies. Courtesy of Amazon Corporate Holdings Singapore and Amazon.com Mauritius. Prior to that in June 2016, the wholesale division received capital of Rs.115 crore ($17.25 million) and in September 2016, Rs.160 crore ($24.8 million).
This three-tranche investment is exactly what Amazon CEO Jeff Bezos was referring to when he spoke about investing in Indian ecommerce.
What does Amazon Wholesale do?
The wholesale unit under Amazon was initiated back in 2013. Amazon Wholesale owns and runs AmazonBusiness, which deals in the sale of FMCG products, food and beverages, health and personal care goods and office supplies.
It also partners with smartphone brands for marketing and distribution assistance. Brands like OnePlus, Coolpad, Honor, Xolo and Huawei which do not have offline distribution have partnered with AmazonBusiness.
AmazonBusiness ships:
- Smartphones – across the country
- FMCG, IT supplies and other offerings only within Karnataka
This form of business first began in cities like Bangalore and Mangalore. Big brands and large distributors tie up with this division of Amazon to supply products to kirana stores, pharmacies and aids corner stores through financial backing from bank and NBFCs partners.
Compared to the previous year’s revenue, Amazon Wholesale’s revenue fell from Rs.6.7 crore last year to Rs.3.2 crore this year. The division’s losses have also increased from Rs.14.4 crore in 2014-15 to Rs.20.4 crore in 2015-16.
Amazon’s primary focus, however, lies mainly in its retail business and outrunning its main competitor, Flipkart. The American online marketplace recently hosted its summer version of the Great Indian Sale and sneaked in more discounts during the Flipkart Big 10 sale. Both etailers out did themselves but neither will refuse to stop there.
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