Amazon invests ₹4,473 crore in India businesses
AMAZON HAS INVESTED ₹3,400 CRORE IN AMAZON SELLER SERVICES, ₹900 CRORE IN AMAZON PAY AND ₹172.50 CRORE IN AMAZON RETAIL INDIA
MUMBAI: Global e-commerce giant Amazon Inc. has infused $631 million (₹4,472.50 crore) into its Indian subsidiaries, including Amazon Seller Services, Amazon Pay and Amazon Retail, show filings with the registrar of companies.
The e-commerce giant has invested ₹3,400 crore in Amazon Seller Services, its online marketplace arm, ₹900 crore in its payments platform Amazon Pay (India), and ₹172.50 crore in Amazon Retail India.
Mint couldn’t ascertain how Amazon plans to utilize the funds for the three subsidiaries.
The development comes even as its rival Flipkart applied for government licences to set up a new local entity, Flipkart Farmermart, which will focus on food retailing in India. Flipkart is expected to pump in ₹2,000 crore initially in the business, with further investments as it expands the supply chain, storage and logistics for the new business.
Flipkart is looking to cash in on its parent, Walmart’s expertise in food retailing, which accounts for a major chunk of the American firm’s business. Walmart runs a cash-and-carry business in India and has partnerships with farmers across the country.
Flipkart’s move shows the food and grocery space is emerging as the next battlefront for e-commerce companies. In August, Kishore Biyani’s Future group had said that Amazon was picking up a 49% stake in Future Coupons, which holds about 7.3% stake in Future Retail through convertible warrants, the company which owns Biyani’s Bigbazaar retail chain. Future Retail has a network of more than 1,500 stores across various formats, including 293 Bigbazaar stores. Earlier,
Amazon had also picked up a minority stake in supermarket chain More.
The latest round of investment comes at a time when the Jeff Bezos-owned e-commerce giant’s India business has witnessed narrowing losses.
Amazon Seller Services saw a 9.5% year-on-year fall in loss to ₹5,685 crore in 2018-19, PTI reported on Tuesday, citing documents sourced from business intelligence platform Tofler. Further, its sales grew 55% to ₹7,778 crore in 2018-19 over the previous fiscal year.
Even as Amazon Seller Services cut losses, it was hit by the poor performance of its payments business. Amazon Pay India, which competes with the likes of Paytm, Flipkart’s Phonepe and Google Pay, recorded widening losses of ₹1,160.8 crore in FY19 from ₹334.20 crore in FY18, as per Tofler. Amazon’s combined losses in India in FY19 were over ₹7,000 crore.
Flipkart has reportedly dominated the festive sales season this year, with around 60% share of the standalone gross merchandise value. Along with Flipkart group entities such as Myntra and Jabong, its has around 63% market share in India, according to the October 8 report by market research firm Redseer Consulting. Last year, Flipkart had a 51% share of festive season sales. Amazon had a 30% market share during the festive season sale, the Redseer report added.