Amazon has always been bullish when it comes to the Indian e-commerce market and considering the exponential rise in the number of online shoppers the US based e-commerce giant is all set to beef up its India operations with verticals like Amazon Prime and Amazon Instant Video.
Amazon Prime is a premium subscription setup which would offer additional benefits to online shoppers which includes on demand based speedy deliveries, no minimum order size and additional discounts. Flipkart had come up with a similar premium subscription model called “Flipkart First” for the Indian customers last year.
According to sources from ET Tech, Amazon will be infusing a staggering amount of $5 billion in India which will help the company expand its network of warehouses and data centres which will put them in a better position when it comes to competing with Indian online retailer majors like Flipkart, Snapdeal and Paytm.
Amazon, which made a foray into the Indian market two years ago, is already worth $2 billion in gross merchandise value. The climbing number of Amazon Web Services customers is also helping the company to achieve the revenue. A recent Morgan Stanley report has pegged the Indian Internet market at a staggering $137 billion by 2020 which gives Amazon more reasons to gain a good foot hold in the Indian market.
The E-commerce giant is already in talks with content providers and music labels to source content for its upcoming Amazon Instant Video. Amazon’s fresh round of investment will put tremendous pressure on Flipkart and other e-commerce companies as they will have to raise a big round of investment from venture capital investors to match up Amazon’s offerings.
Although the things might seem to be all hunky dory from the outside, it will be a herculean task for Flipkart and other e-commerce companies to raise another big round of funding as they have already been funded heavily. Amazon can afford to bleed for a longer time, thanks to the strong global presence and diversified portfolio of services, as compared to Flipkart which has until now managed to garner nearly $3-billion investment from the previous rounds of funding.
Characteristically speaking, the Indian Market boasts of high-volume and low-profits, similar to the US Market where Amazon has been in the lead. The fresh round of investments along with the new verticals is Amazon trump card when it comes to establishing a lead in the Indian market.