Amazon Seller Services, the marketplace unit of the US online retail giant in India, secured huge cash infusion of Rs 26 billion (Rs 2,600 crore) in late last month. This has been disclosed by the documents that Amazon India filed with Registrar of Companies (ROC) last month that has now been sourced by various media houses.
Following the latest funding infusion, Amazon’s total investment into its India business has now touched whopping Rs 20,000 crore. In November last year, Amazon India had received capital infusion of whooping Rs 2,900 crore, which is the biggest fund infusion that Amazon’s Indian unit has received till date. This was immediately followed by another tranche of fund infusion of Rs 1,950 crore in January this year.
Apart from pumping in huge amount of capital, Amazon India has already passed a resolution to increase its authorized share capital to Rs 31,000 crore, which essentially paves way to receive more investment from its parent company.
Amazon gearing up for competition with Flipkart
Although there are rumors that this latest fund infusion may be part of Amazon’s regular business decision and not necessarily to do anything with Walmart-Flipkart deal, the timing of the capital infusion is little conspicuous. There can be little doubt that Jeff Bezos’ company is bracing for intense competition once Flipkart will be officially taken over by Walmart.
Analysts claim that Amazon is very well aware that Flipkart will be supercharged with funds post Walmart deal and its Indian business unit will be in dire need of investment to cope with intense foreseen competition.
Industry experts are completely divided over whether the Seattle based giant can tame down Walmart in the Indian backyard. While it managed to defeat Walmart hands down in the home territory of U.S, many experts feel that Indian market may prove to be completely different cup of tea for Amazon.
How Amazon India will look to leverage the funds?
Sources close to Amazon India claim that the company may use funds to ramp its operations in various critical avenues including grocery, pantry, fashion and smartphone divisions. Amazon has already made huge investments in grocery and pantry especially in the wake of increasing competition from BigBasket, which is one of the major players in the grocery business.
However, Amazon would be desperate to make a real kill in the smartphone and fashion markets, since these are two markets where Flipkart always had an edge. Experts believe that it will prove to be huge morale booster if the U.S based retail giant can make serious dent in these two lucrative markets.