Retail giant Amazon is looking to up its investment in India, an emerging yet crucial market for the company. According to a report by CNBC TV18, the e-commerce company will raise its investment by $2 billion over the already committed $5 billion for its Indian arm. This development comes on the heels of a recent Walmart-Flipkart deal, which may pose a serious threat for Amazon India’s market position. As a result of this acquisition, Amazon is said to be creating a precise strategy for its India operations to continue holding a significant market share going forward. The TV channel’s sources have confirmed that the additional investment is intended to tackle Flipkart’s improved standing post its buyout by Walmart.
The report further adds that the senior management at Amazon India has already been intimated about the additional capital. A blueprint to utilize these funds in expanding India business has also been drafted by the team which directs a major portion of the investment to the company’s e-commerce business and seller services, with the remaining portion going for services like Amazon Prime and others. Industry experts believe that between $3.3-$3.8 billion of the previously committed $5 billion has already been invested into Amazon India, though the company hasn’t officially confirmed any such number. With the latest round of investment, the e-commerce company is reportedly more aggressive with its expansion strategy and will further increase its investment in India over time without providing a firm timeline, informed the TV channel citing its sources.
Despite a sizeable investment from the parent, Amazon India hasn’t succeeded in taking on Flipkart, its biggest local rival. A recent report by Citi states that the former stands with a gross merchandise volume (GMV) of $5 billion while the latter has a GMV of $7.5 billion. Given these numbers, Amazon holds a market share of 30 percent, as compared to Flipkart’s 60-percent share, which is including all its subsidiaries. The report predicts Amazon to touch a revenue of $11 billion by 2027 with an annual growth rate of 23 percent while hitting a GMV of $70 billion. The South Asian country is one of the fastest growing e-commerce market, which has resulted in a number of global players in the space showing their keen interest in grabbing a major share of the market.