Amazon invests Rs. 11,400 crore in India in FY20

In FY2019-20, Amazon invested over Rs. 11,400 crores (US$ 1.5 billion) across its market, payments and wholesale lines of business in India to strengthen its foothold in India.

The e-commerce giant has been investing millions of dollars on deals, infrastructure development and logistics to encourage consumers to buy online.

An Amazon India spokesperson said in response to a comprehensive request sent to the company, “We plan to invest in India with a bigger picture that enables Indian consumers to experience the ease and convenience of e-commerce and other digital products and services.”

Amazon founder Mr. Jeff Bezos confirmed a US$ 1 billion (over Rs. 7,000 crore) investment in India in January 2020  to boost small and medium enterprises online.

The online shopping firm has previously invested US$ 5.5 billion in India, one of Amazon's biggest markets outside the US and a key growth booster.

Amazon, which has been engaged in a competition with Walmart-owned Flipkart for market dominance, also faces competition from Mukesh Ambani-led Reliance Industries, which has strengthened its role in the retail segment globally.

As Reliance Retail Ventures Ltd (RRVL) has raised Rs. 47,265 crore (US$ 6.44 billion) by selling a 10.09% stake, the market is expected to intensify further, providing it more resources to battle against the global giant.

Ms. Anchal Agarwal, CEO and Founder of business intelligence platform Tofler, said, “Other Amazon businesses, with the exception of Amazon Wholesale, increased by around 40-50% in FY2019-20.”

She said, “These companies have also been funding by Amazon International to provide significant capacity for growth. Amazon has raised spending on Amazon Pay, the digital payments company, for advertisement and promotion. They also strongly emphasise the growth of Amazon Seller, the marketplace that grew in FY19-20 by 40%”.

On the financing side, the largest beneficiary of the fund investment was Amazon Seller Services, the e-commerce platform unit in India, earning Rs. 8,408 crore (US$ 1.15 billion) in three tranches.

In FY20, the unit saw revenue from operations increase over 42% to Rs. 10,847.6 crore (US$ 1.48 billion) over the previous fiscal year.

Amazon Wholesale, the B2B unit, received funding of Rs. 360 crore (US$ 49.06 million), while in FY20, Amazon Pay received Rs. 2,705 crore (US$ 368.62 million) in three tranches.

The Amazon Wholesale (India) filing noted that the management of the company is in the process of expanding the company and expressed confidence for future development.

Amazon Internet Services increased operating profits by 57.8% to Rs. 4,161.6 crore (US$ 567.12 million) Amazon Pay (India) by 63.1% to Rs. 1,315.7 crore (US$ 179.30 million), and Amazon Transportation Services by 42.7% over the previous fiscal year to Rs. 2,950.9 crore (US$ 402.13 million) in FY20.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.