Amazon injects $190 Mn in Amazon Seller Services to take on Flipkart & Snapdeal

Amazon has invested Rs 1,234 crore in its Amazon Seller Services, in what is its largest amount to be pumped into its Indian flagship operations since its entry in 2013.

The investment takes Amazon’s total infusion into Amazon Seller Services in the past 10 months to about Rs 3,000 crore. About five months ago, it had pumped in Rs 1,155 crore.

“We are very excited by our growth and continue to invest in technology, especially mobile, infrastructure and logistics to support seller capability in order to deliver value to our customers,” said an Amazon India spokesperson.

In a filing with the Registrar of Companies (RoC) last month, Amazon Seller had said it is raising the money through allotment of equity shares to its US parent company.

India is one of the fastest-growing markets for the US online retail giant. While Amazon did not say how it would use the funds, some analysts said the company will expand its network of warehouses and data centres and beef up its online marketplace to compete better with local rivals.

Last year, Amazon’s founder and chief executive Jeff Bezos had pledged to invest $2 billion in the company’s India operations. The announcement had come a day after Flipkart said it had raised $1 billion from investors.

“We’ve never seen anything like this,” Bezos had said in a statement in June 2014 while announcing the India plan. “After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations.”

On Wednesday, Amazon announced the opening of its 21st fulfilment centre in India. The latest 55,000-sq ft warehouse has come up outside Pune.

The new FC will allow to offer its Fulfilment by Amazon (FBA) service to thousands of small and medium businesses in the region and empower them to gain access to and service customers across the country at significantly low operating costs.

In time for the upcoming festive season, the opening of the FC, will enable local SMEs to leverage Amazon’s trusted platform and nationwide delivery thereby amplifying their reach beyond geographical boundaries.

Pune based sellers, weavers and artisans involved in traditional textiles and local handicrafts too would be able to reach a wider set of customers and provide a delightful customer experience through this new FC. The FC will also provide a fillip to the local economy by enabling the growth of ancillary businesses such as packaging, transportation, logistics, and hospitality across the state.

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