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After Flipkart’s 1Bn fundraising, Amazon announces $2Bn investment in India


Just a day after Flipkart confirmed its $1 billion investment, Amazon has announced that it will invest an additional $2 billion in India to support its growth and improve the customer & seller experience in the country.

Amazon founder and CEO Jeff Bezos mentions that India is on track to be their fastest country every to a billion dollars in gross sales at current scale & growth rates and this investment will enable their team to think “big, innovate, and raise the bar for customers in India”.

Earlier in the week, Amazon’s Indian subsidiary Amazon Seller Services India had opened its third fulfillment center in Chennai and had stated plans to open four more fulfillment centers in Delhi, Jaipur, Ahmedabad and Tauru (outskirts of Gurgaon). With this, Amazon will have seven fulfillment centers across India including its existing Fulfillment Centers in Mumbai and Bangalore.

The company had claimed that this addition will enable them nearly double its total storage capacity to over half million square feet and provide existing and new retailers from both South & North India closer access to Amazon’s fulfillment capabilities.

Amazon had also extended its #AmazonCart service to India earlier in the month, enabling Indian users to tweet and add items to their Amazon shopping cart, which they can check out at a later time.

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New Categories: The company has also been aggressively rolling out more categories to its site since its launch in June last year. It claims to currently offer over 17 million products from more than 20 categories like apparel, books, computers, mobiles, consumer electronics, baby products, health & personal care products, home & kitchen products and beauty products among others.

Logistics: On the logistics side, Amazon India had launched a pilot program to test in-store pick-up service in Delhi and Mumbai in association with BPCL’s In & Out stores. Shoppers were provided the option to select In & Out as the pick-up of point of their Amazon purchases during the checkout process.

This pilot was later extended to Bangalore in the following month, wherein it allowed customers to pick-up their Amazon purchases from local kirana shops.

It had received government approval to set up a logistics business in February 2012, following which Amazon had launched its third-party logistics service in November 2013. A month later, Amazon India launched a pilot project to test India Post’s cash on delivery model.

The company had also launched assisted shipping in India, that lets sellers ship products from their own warehouses using Amazon’s logistics service and had introduced a self-registration feature that lets vendors register on the site and start selling within a day without intervention from any third-party.

FDI in E-commerce: Amazon had also been continuously lobbying with the Indian government to relax the regulations against foreign e-commerce companies and allow foreign direct investment in online retail. This will enable them to adopt a US-like hybrid model wherein Amazon will start retailing products along with the existing marketplace. Remember that Amazon marketplace accounts for only around 40% of their business in the United States.

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With Flipkart’s $1Bn fundraising and Amazon’s $2Bn investment, we wonder what eBay-backed Snapdeal is upto?

Also readAmazon to form e-commerce JV with Catamaran Ventures

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