Amazon is the savior of Indian e commerce, invests $200 m to paddle growth cycle
2nd June 2016Category : E-CommercePublished by :Rahul Verma Reading Time : 4 Minute News Sourced : India
* Amazon began its India operations by allowing buyers to pay by cash, a novelty for it, and recently has leveraged neighbourhood stores for delivery of goods.
* Has picked up 26% stake in Tata Group-owned publishing house Westland and acquired a Noida-based online payments company.
* It has introduced a slew of initiatives for merchants including Amazon-Tatkal, so small businesses can get online in under 60 minutes.
The growing e commerce market is likely to touch USD 38 b this year with the unprecedented growth signals healthy growth of online marketplaces. The marketplaces are pouring funds in course to wearing crown and strengthening verticals to take on challenges and competition in their business.
The Indian E-tailing giants Flipkart, Snapdeal, Shopclues are giving tough competition in pricing, delivery and offers while the top and favorite foreign player Amazon is beefing up its verticals to stand firm in tough times. The shipments of Amazon have increased 150 pc in first quarters, active sellers up by 250 pc and 90,000 products added everyday. According to ET, ‘Amazon has injected at least Rs 6,700 crore since January 2015 into its India unit, Amazon Seller Services — more than half of that since December.’
Recently, Amazon has invested an additional Rs 1,350 crore (about $200 million) in its India arm this year, melting way for others and stepping up its business to the new heights.
The latest investment in Amazon Seller Services, disclosed in regulatory filings on May 31, takes the total capital infused into the main India unit since early 2015 to Rs 8,618 crore. The money came a few weeks before India introduced discounting and vendor-related restrictions for online marketplaces. The company is seriously investing in supply chain and logistics in India. Amazon in January has pushed handsome Rs 1,696 crore into its Indian unit to tackle Flipkart and Snapdeal.
The ‘Amazon’ mantra is low prices, wide product selection and fast and reliable delivery to get hold with shoppers.
Another company Flipkart , started in 2007 is backed largely by Tiger Global, is getting the nerves of ecology in India's online retail industry. The trendsetter company in India is facing stress after Morgan Stanley downstairs its investment at the time of tough competition with Amazon.
The E-commerce marketplaces Flipkart and Snapdeal are unable to raise funds at its preferred valuations, indicating the severe funding slowdown for Indian Internet companies.
The trio Alibaba, Foxconn and SoftBank had led a $500 million round in the e-commerce marketplace in August last year while Ontario Teachers' Pension Plan had led a 1367 cr funding in Snapdeal parent Jasper Infotech in February this year. Snapdeal is also looking to spend more on logistics and technology to compete with arch rivals.
Tiger Global and SoftBank have invested about $1billion each in Flipkart and Snapdeal, respectively.
China based Alibaba and Ant Financial has done crucial investment and picked up stake in PayTm and Snapdeal.
By 2020, India's Internet market is expected to grow to $137 billion from $11 billion in 2013, according to Morgan Stanley.