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Amazon to invest $2 billion in India [India Business] [Times of India](Times of India Via Acquire Media NewsEdge) BANGALORE: Even as the noise was settling down on the massive one-billion dollar fund-raise announced by Flipkart on Tuesday, the world's largest online retailer Amazon put out its intent to invest a blockbuster $2 billion into the India market, taking the e-commerce battle between the two biggies to a feverish pitch. Jeff Bezos, the much-storied founder of the Seattle-based Amazon, said in a statement on Wednesday that at current scale and growth rates, India is on track to become the e-tailer's fastest country ever to clock a billion dollars in gross sales. The seven-year-old Bangalore-based Flipkart, India's largest e-tailer in terms of sales, now valued at $ 7 billion, had achieved the milestone earlier this year. The two back-to-back announcements put the Delhi-based Snapdeal, one of the three larger e-commerce players in India, under pressure to raise fresh capital to fight out Flipkart and Amazon in a fast-growing market backed by billions of dollars of investor money. Bezos said in just a year of launch the response from customers and small and medium-sized businesses here had far surpassed Amazon's expectations. "We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment our team can continue to think big, innovate, and raise the bar for customers in India," he said. Amazon, which is estimated to be clocking $500 million in gross sales, will use the investment to expand its product selection by launching new categories even as its adds heft to its existing 28 categories, improve delivery experience for customers, lower cost structures for sellers, and push its mobile platform, Amit Agarwal, VP & country manager at Amazon told TOI in an exclusive one-one-one chat. Agarwal said the online retailer has been aggressive with its investments in India since its entry and that their rapid growth and ambition may have triggered investments secured by other players. "India's e-commerce industry has truly arrived with $3 billion of investments coming in a span of two days. We are currently where the US was in 2003 and China was in 2007, you can expect a five times growth of the market over the next few years and there is a possibility that it may become a two-way battle between Flipkart and Amazon going forward," said Rehan Yar Khan, general partner, at venture fund Orios Venture Partners. The Indian e-commerce market estimated to be $2.3 billion is expected to become $32 billion strong by 2020, as per retail consultancy Technopak. Flipkart's announcement of raising $1 billion in funding had indicated to the market that it may be able to maintain its lead over Amazon but with this investment, Amazon reinforces its intention clearly to be the at the number one position in the Indian e-commerce market, said Ashish Jhalani, founder of Etailing India. The Amazon marketplace in India is operated by Amazon Seller Services, an affiliate of the Nasdaq-listed Amazon.com. The India announcement comes at a time when Amazon's investors and shareholders have been leery about the company's continued investments in new businesses without turning in consistent profits. Amazon sells 17 million products through 9,000 sellers and offers merchants the option of to avail its services such as Fulfillment By Amazon (FBA) and Easy Ship. Indian regulations do not allow the online retailer to sell through the inventory-led model. On Monday, the 20-year-old company, had said it will open five warehouses to add to the existing two as it looks to deliver faster and reach more customers nationally. It started off with Fulfillment Centres in Bangalore and Mumbai last year. (c) 2014 Bennett, Coleman & Company Limited |