Amazon ups the game, pumps in $630 million in India businesses

Money Control
October 29, 2019

Amazon is investing Rs 4,472.50 crore ($630 million) in three of its Indian businesses, Amazon Pay, Amazon Retail and Amazon Sellers, according to Paper.vc, a Bengaluru-based business insights platform.

The largest chunk of investment of Rs 3,400 crore will go into Amazon Seller Services, which runs the marketplace business, and is the biggest cash guzzler due to deep discounting, promotions and marketing.

Amazon Pay India, which competes with Flipkart’s PhonePe, Paytm, Google Pay among others, will get Rs 900 crore to continue funding cashbacks, marketing and adding more merchants.

The remaining Rs 172.50 crore will be ploughed into Amazon Retail, the food business that will competewith Flipkart’s Farmermart. Amazon Retail will operate as a full-fledged food retail business, including its own label and grocery supply chain.
The investment comes at a time when Flipkart has decided to take a food licence and invest close to Rs 2,500 crore. “We’ve secured all internal approvals for the same already. This newly registered local entity Flipkart Farmermart Pvt Ltd will focus on food retail and is an important part of our efforts to boost Indian agriculture as well as food processing industry in the country,” Flipkart Group CEO Kalyan Krishnamurthy had said in a statement.

The battle of e-commerce giants is driven by how deep their pockets are. Now, even more as Flipkart is majority owned by Walmart, Amazon’s arch rival.

The distribution of investment shows that Amazon wants to deepen its penetration into all its businesses in India.
Recently, Amit Agarwal, Global Senior Vice- President and Country Head, Amazon India, told Moneycontrol, “We want to be the place where most Indians start their shopping journey, we want to be the place where Indians love us enough to become Prime members. I also want Amazon to be the marketplace where most sellers find growth."



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