Amazon Inc has pumped a new round of Rs 2700 crore in Amazon India (Amazon Seller Services Pvt. Ltd), literally 4 months after raising the exact same amount, reports Economic Times. It has also invested Rs 100 crore in its food retail business (Amazon Retail India Pvt. Ltd), a top up to the Rs 10.5 crore it invested in June. ET reports from Paper.vc, which found about the development in Amazon’s filings with the Ministry of Corporate Affairs (MCA).
Amazon has a total investment commitment of $5 billion (approximately Rs 32,600 crore) in India. It had committed $3 billion in June last year, plus the $2 billion investment announced in July 2014, which the company has already exceeded. In the grocery business, it has a goal to invest $500 million in the food retail segment.
The development comes ahead of the festive season when the e-commerce player is expecting an increase in transactions on its marketplace. Amazon has also been investing heavily in setting up its fulfillment centres in India. It recently announced one in Haryana, which has 300,000 square feet of area with about 1.5 million cubic feet of storage space. Previously, Amazon India said that it would have 67 operational fulfilment centres in 13 states across the country by the end of this year. They would have a combined storage space of close to 20 million cubic feet.
Flipkart Vs Amazon
Now that Flipkart has got Walmart’s capital power, it makes sense for Amazon to keep up with its competition. According to this Livemint report, Flipkart is likely to burn about $2 billion in cash by the end of 2019, and India “remains the top priority” after its acquisition by Walmart.
India is a top priority for Amazon as well. In its earnings call for Q1 FY18, CFO Brian Olsavsky had said that the company will continue to invest in India where it is seeing great progress with both sellers and also customers. A week prior to that, in his letter to shareholders, Jeff Bezos highlighted India as a ‘milestone’, stating that Amazon.in is the fastest growing marketplace in India. He also highlighted that Prime added more members in India in its first year than any previous geography in Amazon’s history.
In the food retail segment also, Amazon competes with Flipkart in India. Earlier this month, Flipkart launched its long-awaited online grocery service called Supermart in Bangalore, with plans to expand to 5 – 6 (unnamed) major cities by the end of 2018.