Amazon invests $17m to win India’s biggest shopping season

Photo credit: Mike Seyfang.

Amazon has freshly invested around US$17 million in its Indian marketplace ahead of the festive season, regulatory filings showed, as it preps to take on local rival Flipkart.

The money went to Amazon Wholesale, the company’s subsidiary that works as a distributor to vendors listed on Amazon India.

India’s festive season starts around October and culminates in Diwali. The time is considered auspicious for making big purchases and for gifting, leading shoppers to invest in furniture, jewelry, and gadgets, among other things. Analysts reckon online marketplaces like Amazon, Flipkart, and Snapdeal could make as much as 40 percent of their annual sales during the festive period.

See: Amazon and Flipkart go head to head in October. One has a lot to prove.

Amazon’s fresh investment in Amazon Wholesale will take the total capital raised by the unit to US$23 million, The Economic Times said.

The Internet and Mobile Association of India expects the ecommerce market in the country to be worth about US$31.5 billion by December.

Amazon has been public about its no-holds-barred strategy in India – a key market for the Seattle-based company’s global growth.

See: Amazon India gets a cool $3 billion more while rivals see funding crunch

The investment comes at a time when other global giants like Alibaba and Rakuten are scoping out the Indian market. A recent BofA-Merill Lynch report said Amazon is expected to close the gap substantially with current industry leader Flipkart, but that it would still be trailing the Indian company three years from now.

Amazon, however, has been planning otherwise.

“We do believe that if we execute well and stay razor-focused on working backwards from customer needs and innovate on their behalf, India would be Amazon’s largest geography outside the US,” Manish Tiwary, VP of category management at Amazon India, told Tech in Asia last week.

“We continue to look at India as a key growth region and are committed to invest aggressively with a long-term horizon and transform the way India buys and sells,” he said.

The company did not immediately respond to an email seeking comments on the Amazon Wholesale investment.

Converted from Indian Rupees. US$1 = INR 66.72.

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from Tech in Asia https://www.techinasia.com/amazon-india-festive-season
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