Amazon.com, Inc. (AMZN) Investing More to Expand Its Presence In India

Amazon.com, Inc. (NASDAQ:AMZN) is trying hard to make a strong presence in India, which is among the fastest developing economies of the world. To boost its presence further, the online retailer has set aside a huge amount of Rs. 1,155 crores, says a report from the Economic Times.

Amazon betting big on India

“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,” said an Amazon India spokesperson.

This e-commerce company based in America raised an amount of Rs. 610 crores just three months back. The e-commerce market is largely driven by discounts, and therefore, it becomes an important requisite to have large funds to invest to be able to stand intensifying competition.

No time frame was given by Amazon.com, Inc. (NASDAQ:AMZN), when it announced in July of last year that it has plans of investing about $2 billion (Rs. 12,500 crores) in India. Since then, an investment of about Rs. 2,500 crores has been made by it in India including the latest fund infusion.

Amazon entered India in 2013, and since then it has never made any big investment. The company informed last week in a filing with the Registrar of Companies (RoC) that it is raising the amount through a rights issue to its parent.

Big, but costly market

In Indian market, Flipkart enjoys the first mover advantage, and because of this Amazon will have to make huge efforts for getting into a competitive position and gaining market share. Amazon.com, Inc. (NASDAQ:AMZN) adopts the strategy of creating a marketplace on its site helping the buyers and sellers interact with each other.

Last year, helped by the disruption strategy, e-commerce players were able to post sales amounting $5.3 billion (about Rs 33,000 crore), however, both Amazon and Flipkart posted a net loss of almost Rs 1 crore each day on average. As per the data from Boston Consulting Group and Retailers Association of India, Indian online retail market is expected to get four-times bigger in next five years to $60-70 billion (about Rs 3.72-4.34 lakh crore).