Just a day after Flipkart announced raising of fresh $1 billion of funding from investors which become biggest fund raise ever by Indian e-commerce company, Global e-commerce giant Amazon also announced today that it will invest an additional $2 billion (double of what Flipkart got) to boost the growth of Amazon.in, its online marketplace in India.
“After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations,” said Jeff Bezos, founder and CEO of Amazon.com said in a statement The Economics Times.
Ever since Amazon launched its online marketplace services in India in last year, there has been a lot of turmoil in e-commerce ecosystem in India. Flipkart ran a funding spree and last three rounds being exceptionally huge. Snapdeal also grabbed fundings from global investors. Thereafter, Flipkart acquired India biggest online fashion store Myntra.com.
This latest announcement clearly shows the business enmity between World’s e-commerce giant Amazon and India’s homegrown e-commerce giant Flipkart. Amazon also flaunted how much deep pockets it has got and it required no outer funding for Amazon. It also showed how desperate is Amazon for for its India’s operation.
“We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India,” Bezos said. “At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales. A big ‘thank you’ to our customers in India – we’ve never seen anything like this,” – Jeff Bezos, founder and CEO of Amazon
Amazon has ramped up very quickly in India since its launch in June last year. It now sells over 17 million products across 28 categories and hosts about 8,500 merchants on its marketplace. Both Amazon and Snapdeal have sold about $600 million (about Rs 3,600 crore) worth of products this year and are targeting $1 billion or Rs 6,000 crore sales this fiscal.
Flipkart on other hand has so far raised over $1.7 billion in risk capital and crossed US$1 billion in gross merchandise value (GMV), which is the value of items bought on the site, in February this year and became India’s largest online retailer ahead of Amazon and Snapdeal.