NEW DELHI: Upbeat about the country’s consumption story despite the slowdown, US-based Amazon is investing a whopping Rs 3,400 crore into Amazon Seller Services, the online marketplace unit of the e-commerce giant.
Based on the filings with the Registrar of Companies (RoC), the Jeff Bezoz-owned online retailer is also pumping in Rs 900 crore into its payments arm Amazon Pay (India) and Rs 172.50 crore into Amazon Retail India, taking its total investment into the India business to Rs 4,472.5 crore (USD 631 million).
Data sourced from paper.vc showed that Amazon has consistently grown its investment in its India marketplace, starting with Rs 4.6 crore in 2011 to Rs 6,200 crore in 2017, and touching Rs 9,450 crore in 2018. This would be the Seattle-based company’s second investment in its marketplace this year after it invested Rs 2,800 crore in June.
The fresh funding is also indicative of its confidence in the Indian market, where its marketplace arm - Amazon Seller Services - has narrowed its loss to Rs 5,685 crore for 2018-19, down from Rs 6,287 crore in the previous year.
While Amazon’s revenue from operations grew 55 per cent year-on-year to Rs 7,778 crore in FY19, its expenses soared 15.6 per cent to Rs 10,802 crore as the company is spending aggressively to expand its
dominance in India.
However, its cumulative losses still stand at over Rs 7,000 crore across various units in FY19. Both Amazon and Flipkart have been pumping in millions in a race to grab a bigger share of the Indian e-commerce pie.
Meanwhile, Flipkart has applied for government licenses to set up a new local entity - Flipkart Farmermart - that will focus on food retail in India. The Walmart-owned firm may pump in Rs 2,500 crore initially in the business and invest further as it scales up the supply chain, storage and logistics for the new business.
"We’ve secured all internal approvals for the same already. The newly registered local entity 'Flipkart Farmermart Pvt Ltd' will focus on food retail and is an important part of our efforts to boost Indian agriculture as well as food processing industry in the country," Flipkart Group CEO Kalyan Krishnamurthy said.