Amazon invests Rs 1,660 crore in its Indian arm as battle tightens with Walmart-owned Flipkart

Ecommerce giant Amazon has once again infused Rs 1,660 crore into its India-based marketplace entity, Amazon Seller Services, TOI reported citing the company's regulatory filings sourced from the market intelligence platform Tofler.

The decision comes as part of a broader strategy to strengthen its presence in the rapidly growing Indian e-commerce sector.

Notably, this is not the first instance of investment this year, as the company had previously invested Rs 830 crore in February, following a Rs 350 crore funding in January into its fintech unit, Amazon Pay.

Investment structured?

“The board is accorded for allotment of 166 crore equity shares of Rs 10 each aggregating to Rs 16,60,00,00,000 to existing shareholders on the right basis,” Amazon said in its filings.

The transaction was directed towards Amazon Corporate Holdings Ltd and Amazon.com, Inc. As revealed in a regulatory filing, the board of directors of Amazon Seller Services granted approval for this investment on April 15.

What does this mean for the ecommerce market in India?

Amazon's investment is part of a larger competitive landscape in India, where it faces stiff competition from other major players like Flipkart and Meesho.

Both rivals are actively enhancing their financial capabilities, with Flipkart receiving about Rs 924 crore in January and Meesho closing a funding round of $275 million recently.

These movements reflect the intense competition and potential growth in the Indian ecommerce market, which is projected to reach $200-230 billion by 2030.

CEO Andy Jassy stated that Amazon plans to invest an additional $15 billion in India over the next few years. To date, the company has invested $11 billion in the Indian market.

Diversifying offerings

Apart from making investments, Amazon is also diversifying its offerings in India.

The company launched a new vertical called Amazon Bazaar earlier this year, which focuses on low-priced, unbranded fashion and lifestyle products.

As per the company, Bazaar is aimed at competing directly with similar platforms like Meesho's marketplace and Flipkart's Shopsy, as well as upcoming ventures like Reliance Industries' Ajio Street.

Despite the aggressive investments and expansions, Amazon Seller Services reported a revenue increase of 3.4% to Rs 22,198 crore for the fiscal year ending March 31, 2023. However, the net loss for the entity widened by about a third to Rs 4,854 crore.