Amazon India Aims To Expand Business, Invests $3 Billion
Indians have grown quite fond of online shopping because of the convenience it offers. The growth of e-commerce in India has now led the e-commerce giant Amazon to invest $3 billion in India’s e-commerce market which amounts to a total investment of $5 billion. Amazon made this clever move based on Morgan Stanley Research which predicted that the Indian e-commerce market will soon be worth $119 billion by the year 2020. According to Jeff Bezos, the Chief Executive Officer of Amazon, Amazon India is performing well beyond his expectations and that is why this move is totally justified at this moment.
Amazon’s decision to invest in India’s e-commerce market was announced at an event which was also attended by Indian PM Mr. Narendra Modi. The CEO of Amazon also declared that he is also going to start a Web Services Cloud Region in the country and also build its largest software engineering and development center in none other than Hyderabad, India’s one of the most important industrial hubs. Amazon India has already contributed towards providing near about 45,000 jobs in India and the number continues to grow with each passing day. Bezos looks forward to do more business with India as it can see huge scope in the Indian economy.
Is Amazon really performing beyond expectations in India?
Well, the statistics say so. ComScore reported that Amazon India saw about 30 million visitors during the Diwali festival season last year. Jeff Bezos too had claimed that it was the most frequently visited e-commerce site in India then. Furthermore, the performance of Amazon India is known to us all. We love Amazon, don’t we? In spite of our own Flipkart and Snapdeal, Amazon India is our all time favorite. Especially when it comes to books and accessories, Amazon’ collection is unmatched.
Amazon’s investment in India places challenge for local e-commerce startups
Amazon’s journey in India has not been a smooth run. The local e-commerce stores like Snapdeal and Flipkart have posed stiff competition to it by raising considerable funds from various sources. Like Flipkart last year managed to raise $700 million setting its worth at $15 billion while Snapdeal followed suit by raising $200 million setting its total value at $6.5 billion. So, you can see Amazon is already facing stiff competition from the Indian startups. Furthermore, Flipkart acquires 45% market share in GMV (Gross Merchandise Value), Snapdeal has 26% but Amazon measures to only 12% of market share in India. Amazon’s investment in the Indian e-commerce market is hopefully going to change things a bit.
How does Amazon plan to expand its reach in India?
Amazon is planning to adapt to the local model considering the fact that India is not much developed in terms of infrastructure, where all rural people do not have bank accounts, Internet connections can be tricky and all other sorts of problems surface every now and then. The adaptation of Amazon India to the local model includes its deliveries made by the company itself and not third parties like that of US.
Amazon’s announcement of the investment it is going to make in India was attended by PM Narendra Modi. Let us all hope that Indian e-commerce conditions prove to be a boon for the US e-commerce giant and we all get their exemplary services and let the digital industry boom in India. What do you have to say on the matter? You can provide your feedback in the comments section given below. Have a productive day!