Amazon invests in India business about $631 million
Global e-commerce giant Amazon Inc has invested $631 million (or ₹4,472.50 crores) in its Indian units Amazon Seller Services, Amazon Pay and Amazon Retail, filings with the Registrar of Companies showed.
Based on the filings, the e-commerce giant has invested ₹3,400 crores into Amazon Seller Services — its online marketplace arm, ₹900 crores into its payments platform Amazon Pay (India) and ₹172.50 crore into Amazon Retail India.
Amazon’s plans on how these three subsidiaries would use the latest funds, could not be independently ascertained.
The development comes after its rival Flipkart applied for government licenses to set up a new local entity – Flipkart Farmermart – that will focus on food retail in India. It is expected that Flipkart may pump in ₹2,000 crore initially in the business and invest further as it scales up the supply chain, storage, and logistics for the new business.
Flipkart is looking to cash in on its parent Walmart’s expertise in the food retail segment that accounts for a major chunk of the American firm. Walmart has partnerships with farmers in India and already runs a cash-and-carry business in the country.
Flipkart’s plans show that the food and grocery space is emerging as the next battlefront for e-commerce companies.
In August, Kishore Biyani’s Future group announced that Amazon would pick up a 49% stake in Future Coupons, which holds about 7.3% stake in Future Retail through convertible warrants, the company that holds Biyani’s BigBazaar retail chain. Future Retail has a network of over 1,500 stores across various formats, including 293 BigBazaar stores. Amazon had earlier also picked up a minority stake in the supermarket chain More.
The latest round of investment also comes when the Jeff Bezos-owned e-commerce giant’s India business cut its losses. Its marketplace arm, Amazon Seller Services, narrowed its loss to ₹5,685 crore for 2018-19, a 9.5% decrease from the last financial year, the Press Trust of India reported on Tuesday citing documents sourced by business intelligence platform Tofler. Further, its sales grew 55% year-on-year to ₹7,778 crore in 2018-19.
Even as Amazon Seller Services cut losses, the poor performance of its payments business overshadowed it. Amazon Pay India, which competes with the likes of Paytm, Flipkart’s PhonePe and Google Pay, recorded a manifold rise in losses. It widened its loss from ₹334.20 crore in FY18 to ₹1,160.8 crore in FY19 Tofler. Amazon’s losses in India in Coupled with its other entities in FY2018-19 were more than ₹7,000 crore.