Ecommerce

Amazon India Bolsters Operations with $199 Million Boost from US Parent

• ByStartupStory     |    May 15, 2024

Amazon India has received a fresh investment of Rs 1,660 crore ($199 million) from its US-based parent company, Amazon.com, Inc. This capital injection, as disclosed in a regulatory filing, was approved by the board of directors of Amazon Seller Services on April 15.

The funding was facilitated through the allocation of 1.66 billion equity shares, each priced at Rs 10, to Amazon Corporate Holdings Ltd and Amazon.com, Inc. This strategic move underscores Amazon’s ongoing commitment to expanding its footprint and enhancing its services in one of the world’s most rapidly growing markets.

The infusion is part of a broader investment strategy by Amazon in India, with over Rs 1,000 crore already invested into its local entities this year alone. These investments included Rs 830 crore in February to the marketplace entity and Rs 350 crore in January to Amazon Pay, the fintech arm of Amazon India.

The capital boost comes at a time when competition is intensifying in the Indian e-commerce sector. Amazon’s key rivals, Flipkart and Meesho, have also been actively raising funds. Flipkart recently secured Rs 924 crore from its Singapore-based entities, and Meesho closed a $275 million funding round as part of a larger $600 million target.

Adding to its diverse portfolio, Amazon India has also ventured into a new domain with the launch of Amazon Bazaar, a platform offering low-priced, unbranded fashion and lifestyle products. This move is aimed at capturing a larger share of the budget-conscious consumer segment, directly competing with similar initiatives like Flipkart’s Shopsy and Reliance Industries’ upcoming Ajio Street.

Besides e-commerce, Amazon has been significantly focusing on its cloud services division, Amazon Web Services (AWS). AWS’s importance was highlighted by Amazon’s CEO, Andy Jassy, who last year outlined a plan to invest an additional $15 billion in India, aiming to boost total investments to over $26 billion by 2030.

Despite these aggressive expansion plans, Amazon Seller Services reported a modest 3.4% increase in revenue for the fiscal year ending March 2023, totaling Rs 22,198 crore. However, the company’s net losses also widened by about a third to Rs 4,854 crore, indicating the competitive and costly nature of scaling operations in such a dynamic market.

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